Family takes issue with Michigan estate recovery laws

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A new dispatch from the Land of the Gimme-Gimmes and the Home of the I-Want-Mores.  Wouldn’t we all like to keep our property for ourselves rather than use it for cost of living expenses like nursing home care?  But that’s not the real world.  And don’t think Medicaid planning is the answer!  If that’s your solution, at least do it honestly by stealing outright from your neighbors, friends and other family members instead of hiding behind a theft-disguised-as-a-government-program action.  Estate of Denial® has written on that subject many times.

Nonetheless, whether the financial burden falls on taxpayers or companies in a union environment, affording a populace that embraces one’s adulthood spent sporting the maturity of a 13-year-old with generous parents on allowance day is expensive and unsustainable.  In Michigan’s years-long descent into economic oblivion, it could be hoped this realization might begin to emerge.  Evidently not.

Kudos to Katherine Thelen of Grand Rapids for this comment:

So let me get this straight, you want to take care of everyone, not make them pay for their own care, not have your taxes increase, have a balanced budget and if you don’t get this fairy tale you blame the government? What happen to personal responsibility? If they want to keep the house, give the state of MI $39,000.

A ray of sunshine!!  Even if personal responsibility isn’t a component of this family’s belief system, the self-serving play would have been to at least educate themselves on who was picking up their mother’s long-term care tab.  In doing so, they would likely have found that on behalf of Michigan taxpayers, the state has every right to put a lien on this property in order to satisfy an unpaid debt.  Instead, resistance to the “no such thing as a free lunch” reality continues.

Here’s the article inspiring this rant:

GLENN, Mich. (WOOD) – Families dealing with the death of a parent are finding that her will doesn’t matter. The State of Michigan has cut in line to get the proceeds of her estate.

Lillian Collins’ family was supposed to keep her home near Glenn in Allegan County — which has been in the family since 1950 — after she died last year at age 84. Now, instead, the State of Michigan wants it.

Shirley Logsdon and her brother were shocked when they found out that the will their mother left didn’t matter. The siblings were supposed to inherit the house but now the state has gone to the Michigan Probate Court and put a lien — a claim on property to settle a debt — on it.

“They’re asking for $35,000,” Logsdon told 24 Hour News 8.

That’s because Lillian Collins spent the last year of her life in a nursing home and was covered under Medicaid.

Since July 2011, the state has been enforcing the Estate Recovery Law. The law aims to recoup taxpayer money from individuals who received long-term Medicaid care.

“My brother is 62 years old,” said Logsdon. “He’s getting ready to retire. The house was willed to him. We both knew the property was willed to both of us and now if the State of Michigan takes this property, he’ll be kicked out on the road. He has no place to go.”

Elder law and estate planning attorney David Carrier said the state is trying to get what money it can.

“They’re looking under the cushions for the loose change,” said Carrier.

Carrier said some states have had similar laws for years, but have recovered little money for the taxpayers.

“Less than 1%,” said Carrier. “This is not a solution to ‘How do we pay for long term care?’”

Carrier says he was surprised when the state decided to try estate recovery because it applies only to cases that go thru Probate Court and there are ways to avoid that, such as using Trusts to preserve assets for the family.

“There are ways to hang on to the house, but you have to plan,” said Carrier. “You don’t get any do-overs.”

There are some hardship exemptions in the recovery law, but so far Logsdon has been told they don’t apply in her case.

The family has appealed and is waiting for a hearing date — possibly the first since the state has started enforcing the law.

Attribution:

Family may lose home to Estate Recovery
Law aims to get back taxpayer Medicaid money
Henry Erb
March 27, 2012
WoodTV.com
http://www.woodtv.com/dpp/news/local/allegan_county/Family-may-lose-home-to-Estate-Recovery

 

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  • Anon

    The worst part of this article is that they missed the bigger story which is that the State of MI is pursuing some of these cases where they have no real hope of collecting anything and doing it at the tax payers added expense. For instance, a poster in this same article was a family member who stated the home only has a value of 22,000. As a Medicaid recipient they didn’t have more that $2,000 in liquid assets right? Estate value of approximately $24,000 give or take. The problem here is that as a general creditor the State of Michigan has to get in line. Attorney fees for probating an estate can range from 1,500-5,000 depending on the complexity(State of MI claims increases the complexity). A family allowance of $14,000 is paid to the living children before any creditors. At minimum this Estate has $17,000 gone before the State. Funeral/Burial expenses? Yup they come first too and we know they are not cheap. Without listing all other creditors that get a stab at the estate before the State of Michigan, I should probably mention that the statute states that 50% of the average home price in the county is exempt from Estate Recovery. It doesn’t take a math major to figure out this estate is not worth pursuing but they are. There’s the real story.