## Facts

- Arlyn E. Darby entered a Mississippi nursing home and applied for Medicaid benefits.
- Darby’s daughter, Linda Darby Stinson, signed the Medicaid eligibility contract on Darby’s behalf.
- The contract stated that the Mississippi Division of Medicaid could seek recovery of Medicaid benefits from Darby’s “estate” after his death and defined “estate” as a person’s “real and personal property.”
- Darby received Medicaid benefits for nursing-home care and died on May 20, 2009.
- At death, Darby owned a house valued at less than $75,000 and personal property valued at less than $10,000.
- Darby’s will devised the house and personal property to his children and a grandchild.
- The Mississippi Division of Medicaid filed a probate claim against Darby’s estate for $123,716.13, citing federal and state Medicaid estate-recovery law.
- Stinson, acting as executrix, objected and contended the assets were exempt under Mississippi law and, because of the exemption-descent rules, passed to the heirs outside the probate estate, free of creditor claims.
- The chancery court granted summary judgment for Stinson and denied Medicaid’s claim; Medicaid appealed to the Mississippi Court of Appeals.

## Issues

1. Whether the Mississippi Division of Medicaid was entitled to reimbursement from Darby’s estate for Medicaid benefits paid.
2. Whether exempt property that descends outside the probate estate is included in the “estate” reachable through Mississippi’s Medicaid estate-recovery statute.
3. Whether the Medicaid eligibility contract language operated as a waiver of Mississippi homestead and related exemption protections.

## Decision

- The Mississippi Court of Appeals affirmed the summary judgment for the estate.
- Although Medicaid has statutory authority to pursue estate recovery, Mississippi had not expanded the definition of “estate” for recovery purposes to reach exempt, non-probate property.
- Darby’s homestead and exempt personal property descended to his children and grandchild outside the probate estate and were not subject to Medicaid’s probate claim.
- The eligibility contract’s general reference to recovery from the “estate,” even with “estate” defined as real and personal property, did not clearly show a knowing waiver of the homestead exemption or other statutory exemptions.

## Legal Principles

- Federal Medicaid law requires estate recovery in specified circumstances but leaves states to define the recoverable “estate” unless the state adopts an expanded definition allowed by federal law.
- Under Mississippi law, exempt homestead and exempt personal property may pass to qualifying heirs outside the probate estate and are not available to satisfy creditor claims when the statutory conditions for exemption and descent are met.
- Mississippi’s Medicaid estate-recovery statute does not, by itself, extend recovery to non-probate exempt property absent legislative expansion of the definition of “estate.”
- Waiver of Mississippi homestead and exemption rights must be clear and specific; a generalized acknowledgment that Medicaid may recover from an “estate” is not enough to surrender exemption protections.

## Conclusion

In *In re Estate of Darby*, the Mississippi Court of Appeals held that the Division of Medicaid could not recover $123,716.13 from Darby’s exempt homestead and exempt personal property because those assets passed to his descendants outside the probate estate under Mississippi exemption law, and the Medicaid eligibility contract did not contain sufficiently clear language to waive the homestead and related statutory exemptions.


In re Estate of Darby, 68 So. 3d 702 (2011)