## Facts

- Dolores J. Barg and Francis E. Barg were married from 1948 until Dolores’s death in 2004.
- The couple acquired a Minnesota homestead in joint tenancy (and held other assets jointly).
- In 2001, Dolores entered a nursing home and later qualified for Minnesota medical assistance (Medicaid).
- After eligibility was established, Dolores transferred her interests in jointly held assets, including the homestead, to Francis.
- Minnesota paid nearly $110,000 in medical-assistance benefits on Dolores’s behalf before her death.
- After Francis died, the county responsible for benefits administration filed a probate claim against Francis’s estate to recover benefits paid for Dolores.

## Issues

1. Whether federal Medicaid law preempts a state statute authorizing recovery from the estate of a surviving spouse of a Medicaid recipient.
2. Whether federal law preempts a state definition of “estate” that permits recovery from a surviving spouse’s estate for assets the recipient did not legally own at death.
3. Whether, given Dolores’s pre-death transfers, she retained any legal interest at death that could support recovery from Francis’s estate.

## Decision

- The Minnesota Supreme Court held federal law does not categorically bar recovery from a surviving spouse’s estate; the state’s authorization of such claims was not facially preempted.
- The court held federal law limits the scope of recoverable assets; the state statute was preempted to the extent it authorized recovery for assets in which the recipient had no legal interest at the time of death.
- Applying that limitation, the court held Dolores had no qualifying legal interest at death because she had fully transferred her interests to Francis before she died.
- The county’s claim against Francis’s estate was disallowed.

## Legal Principles

- Federal Medicaid estate-recovery law permits states to seek recovery not only from a recipient’s probate estate, but also (if the state elects) from an expanded “estate” limited to assets in which the recipient had a legal title or interest at the time of death, including certain nonprobate transfers.
- A state may authorize recovery from a surviving spouse’s estate, but only for property traceable to the recipient’s legal interest at the recipient’s death; broader state recovery rules conflict with federal law and are preempted.
- Where a Medicaid recipient fully divests all legal interests in property before death, the state cannot recover benefits from the surviving spouse’s estate based on that property.

## Conclusion

The court permitted surviving-spouse estate recovery in principle but enforced a strict federal time-of-death ownership limit, which barred recovery here because the recipient held no legal interest in the relevant assets when she died.


In re Estate of Barg, 752 N.W.2d 52 (Minn. 2008)