A Tenness
ee court of appeals holds that the state's claim against the estate of a Medicaid recipient is not time-barred because the recipient's heirs never gave notice of the recipient's death or filed a release once the estate was opened, so the statute of limitations did not begin to run. In re Estate of Stidham (Tenn. Ct. App., No. E2011-02507-COA-R3CV, Aug. 23, 2012).
Omer Stidham transferred his property to a revocable trust. He entered a nursing home and received Medicaid benefits until his death in October 2008. His heirs did not attempt to administer his estate because the estate was insolvent except for the property in the trust. In November 2009, the state filed a petition to appoint an administrator of the estate, alleging that it was entitled to reimbursement for Medicaid benefits.
The heirs argued that the claim was time-barred because it was filed more than one year after Mr. Stidham's death. They also argued that the state could not recover the property because it was not a part of the estate. The state argued the one-year statute of limitations did not bar its claim because it did not receive notice of Mr. Stidham's death as required under state law. State law also provides that before a probate estate can be closed, the personal representative must file a release evidencing that Medicaid benefits have been paid. The trial court ruled for the state, and the heirs appealed.
The Tennessee Court of Appeals affirms, holding that the claim was not time-barred and the property was recoverable. According to the court, because the heirs did not give the state notice of Mr. Stidham's death or file a release once the estate was opened as required by state law, the statute of limitations did not begin to run. The court also holds that property in a revocable trust is recoverable by the state for the payment of Medicaid debts.
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