A Massachusetts land court rules that the state cannot recoup Medicaid benefits from a Medicaid recipient’s property, which was left in a life estate that had a scrivener’s error and included a limited power of appointment. Estate of Koutoukis v. Secretary of the Executive Office of Health and Human Services (Mass. Land Ct., Dept. of the Trial Ct., No. 20 MISC 000004 (RBF), Sept. 17, 2021).

Athena and Sotirios Koutoukis hired an attorney to create a life estate in their property, leaving the remainder to their daughters. They retained a power of appointment to convey the property to their children. Mr. Koutoukis received MassHealth (Medicaid) benefits before he died. After Mr. Koutoukis’s death, the attorney for the estate discovered that the deed included the words “tenants in common for life and further,” which was an error.

The estate filed for probate in order to correct the scrivener’s error, and the state filed a claim against the estate in order to recoup the Medicaid benefits paid on Mr. Koutoukis’s behalf. The state filed for summary judgment, arguing that because Mr. Koutoukis left property in his will to his wife, he did not intend to create a life estate and that the power of appointment in the deed made the property a countable asset. The estate also filed for summary judgment.

The Massachusetts Land Court, Department of the Trial Court, grants summary judgment to the estate, holding that the deed can be reformed and the state cannot recoup benefits from the property. According to the court, the evidence clearly establishes that the Koutoukises intended to create a life estate, and the state did not provide any evidence to the contrary. The court further holds that the power of appointment in the deed is a limited power that did not permit the Koutoukises to grant the property to themselves, so the property was not a countable asset for Medicaid purposes.

For the full text of this decision, click here.

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