New York’s highest court rules that the funds in a deceased nursing home resident’s guardianship account must pass to the resident’s estate to pay a Medicaid claim instead of being used to reimburse the nursing home that had a claim against the guardianship account. Shannon v. Westchester County Dept. of Social Servs. (N.Y., No. 80, June 10, 2015).
Eastchester Rehabilitation & Health Care Center applied for a guardian for resident Edna Shannon and also applied for Medicaid on her behalf. The court appointed a guardian, and the state granted Ms. Shannon Medicaid benefits. The nursing home filed a claim with the guardian for services provided Ms. Shannon that were not covered by Medicaid. The court approved the sale of Ms. Shannon’s home, and the money went into the guardianship account.
After Ms. Shannon died, the state filed a claim against her estate for reimbursement of Medicaid expenses. The nursing home argued its claim accrued before the state’s claim because the state did not have a lien against Ms. Shannon’s home. The state argued that it was a preferred creditor, and the trial court agreed. The nursing home appealed, and the appeals court reversed, holding that the nursing home is entitled to reimbursement from the guardianship account before any funds pass to the estate. The state appealed.
The New York Court of Appeals, the state’s top court, reverses, holding that all money from the guardianship account must pass to the estate. The court concludes that state law permits a guardianship account to retain only property needed to satisfy the administrative costs of the guardianship, not to pay a claim against the incapacitated person that arose before that person’s death.
For the full text of this decision, go to: https://www.nycourts.gov/ctapps/Decisions/2015/Jun15/80opn15-Decision.pdf