Estate Planning Trust & Probate Law
Pop Quiz :
Estate Claims – Who Wins? Nursing Home or Medicaid?
Extra Credit:
Can the Estate Pay for the Appeal? By Edward M. Smith Chair: Estate Planning Trust & Probate Law Section Nolan Sprowl & Smith
O
ccasionally, a case comes along that seems counterintuitive. In Probate Court, we have a statute which sets the priority of claims. Ohio Revised Code Section 2117.25 should be consulted in just about every estate you handle. One of the many duties of a fiduciary is to settle the debts of the decedent and determine priorities under that section. Often there are competing claims with different priorities in an insolvent estate. Under the claim statute, the nursing home claim has priority over the Medicaid claim.1 Yet, in the Estate of Margaret Edwards, it did not. For nursing homes, this is the painful holding of Wiesenmayer, Admin v. Vaspory, Case No. 27931 (2d Dist. 2019). Shortly after Margaret Edwards died in 2016, Ohio Department of Medicaid (ODM) filed a “Medicaid lien” against her real property in Harrison Township, acting pursuant to Section 5162.21, the state recovery program. In the meantime, the nursing home’s attorney applied to be
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Dayton Bar Briefs October 2019
appointed special administrator to present a claim against the estate. The Montgomery County Probate Court appointed Wiesenmayer. After the special administrator was appointed, ODM likewise filed a claim against the estate. The Administrator then filed a land sale action. When the Administrator came to distribute the proceeds, he sought clarification from the Probate Court on the priority of claims. The Court found that the Medicaid lien was valid under Section 5162.21, even though filed after death.2 The lien therefore attached to the proceeds of the land sale and was not governed by the priorities of the claim statute, Section 2117.25. The Administrator then appealed the Probate Court’s decision that the Medicaid lien was paid first out of the land sale proceeds. In an Opinion authored by Judge Michael Tucker, the Court of Appeals held that Sections 5162.21 and 5162.211 authorized ODM to file a lien after death and
that ODM was entitled to priority due to the priorities established by the land sale procedures in Sections 2127.18, 2127.19 and 2127.38. Therefore, the Probate Court’s determination was affirmed. Judge Jeffrey Froelich authored a lengthy dissent on the basis that the post-death recording of the lien was not valid and that the current statutory language does not support the imposition of post-death liens. Judge Froelich therefore concluded that the claim statute governed, and the nursing home should be paid first. Judge Michael Hall concurred in Judge Tucker’s Opinion but added that there is a good reason for the statutory preference when there is real estate, since
continued on page 11 ENDNOTES: 1 Ohio Revised Code Sections 2117.25 (A) (7) and 2117.25 (A) (8), respectively. 2 The nursing home claimed the lien was not valid and did not attach to the real estate since it was filed post-death.
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