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In re Estate of Krueger

Supreme Court of North Dakota

February 21, 2019

In the Matter of the Estate of Frederick Ardell Krueger, Deceased
v.
Jodi L. Fugleberg, Respondent Jerilyn Braaten, personal representative of the Estate of Frederick Ardell Krueger, deceased, Petitioner and Appellant and North Dakota Department of Human Services, Claimant and Appellee

          Appeal from the District Court of Grand Forks County, Northeast Central Judicial District, the Honorable John A. Thelen, Judge.

          Shannon P. Uglem, Northwood, ND, for petitioner and appellant.

          James E. Nicolai, Office of the Attorney General, Bismarck, ND, for claimant and appellee.

          OPINION OF THE COURT

          VandeWalle, Chief Justice.

         [¶1] Jerilyn Braaten, the personal representative of the Frederick Ardell Krueger Estate, appealed from an order holding the Department of Human Services may recover 100 percent of the net proceeds from the sale of Krueger's home to pay for medical assistance benefits previously received by his deceased spouse. We conclude the district court erred in ruling the Department is entitled to 100 percent of the net sale proceeds. We reverse and remand for the court to permit the Department to recover 50 percent of the net sale proceeds.

         I

         [¶2] The facts are undisputed. In 1975 Lorraine and Frederick Krueger acquired their marital home in Northwood as joint tenants. In 2000 Lorraine Krueger began receiving medical assistance or Medicaid benefits which continued until her death in 2014. Frederick Krueger died in 2017 and his estate received $75, 391.50 in net proceeds from the sale of the home. The Department filed a claim against his estate to recover 100 percent of the proceeds from the sale of the marital home to apply to the $278, 182.13 in Medicaid benefits Lorraine Krueger had received. The district court ruled the Department could recover 100 percent of the sale proceeds.

         II

         [¶3] The sole issue on appeal is whether the Department is entitled to recover 100 percent or 50 percent of the net proceeds from the sale of Frederick Krueger's home to apply to medical assistance benefits received by Lorraine Krueger. This issue involves statutory interpretation, which is a question of law, fully reviewable on appeal. See, e.g., In re Estate of Wirtz, 2000 ND 59, ¶ 8, 607 N.W.2d 882.

         [¶4] Federal law allows "states to trace the assets of recipients of medical assistance and recover the benefits paid when the recipient's surviving spouse dies." In re Estate of Thompson, 1998 ND 226, ¶ 15, 586 N.W.2d 847 (footnote omitted). Section 50-24.1-07, N.D.C.C., specifies the procedure for recovery of funds paid under the medical assistance program. We have said the broad language of N.D.C.C. § 50-24.1-07 fully implements federal law, and we look to 42 U.S.C. § 1396p(b) to provide the meaning of the state statute because the federal statute limits the situations in which the states can recover Medicaid benefits from a surviving spouse's estate. See In re Estate of Bergman, 2004 ND 196, ¶ 7, 688 N.W.2d 187; Wirtz, 2000 ND 59, ¶¶ 6-7, 607 N.W.2d 882; Thompson, at ¶¶ 10-11. Under 42 U.S.C. § 1396p(b)(4)(B), a deceased individual's "estate" includes not only real and personal property and other assets as defined under state probate law, but may include:

any other real and personal property and other assets in which the individual had any legal title or interest at the time of death (to the extent of such interest), including such assets conveyed to a survivor, heir, or assign of the deceased individual through joint tenancy, tenancy in common, survivorship, life estate, living trust, or other arrangement.

         [¶ 5] In Bergman, 2004 ND 196, ¶ 7, 688 N.W.2d 187, we construed this statutory scheme:

We hold any assets conveyed by [the institutionalized spouse] to [the community spouse] before [the institutionalized spouse's] death and traceable to [the community spouse's] estate are subject to the department's recovery claim. However, the recoverable assets do not include all property ever held by either party during the marriage. Cf. Estate of Jobe, 590 N.W.2d 162, 166 (Minn.Ct.App. 1999). 42 U.S.C. ยง 1396p(b) contemplates only that assets in which the deceased recipient once held an interest will be traced. It does not provide that separately-owned assets in the survivor's estate, or assets in which the deceased recipient never held an interest, are subject to the department's claim for recovery. Thus, recovery from a surviving spouse's separately-owned assets because of a past obligation to ...

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