In re the Matter of: Esther Schmalz and the Commissioner of Minnesota Department of Human Services, Renville County Human Services.
Renville County District Court File No. 65-CV-18-157
Ellison, Attorney General, Ali P. Afsharjavan, Assistant
Attorney General, St. Paul, Minnesota (for appellant
Commissioner of Minnesota Department of Human Services)
J. Swansson, Jon C. Saunders, Anderson Larson Saunders
Klaassen & Dahlager, P.L.L.P., Willmar, Minnesota (for
respondent Esther Schmalz)
J. Torgelson, Renville County Attorney, Olivia, Minnesota
(for Renville County)
Considered and decided by Halbrooks, Presiding Judge; Reyes,
Judge; and Cochran, Judge.
the terms of Minn. Stat. § 256B.056, subd. 4a (2018), a
community spouse's non-homestead life-estate interest is
not salable unless the owner of the remainder interest
intends to purchase the community spouse's life estate or
the entire property is sold. When a life estate is deemed not
salable, it is not considered for purposes of determining
eligibility for medical-assistance long-term care benefits
for the institutionalized spouse.
Commissioner of Minnesota Department of Human Services
challenges a district court order reversing the
commissioner's determination that respondent applicant
was ineligible for medical-assistance long-term care (MA-LTC)
benefits. The commissioner asserts that the district court
erred by holding that the value of non-homestead life-estate
interests held by the applicant's community spouse is not
considered available to the applicant for purposes of
eligibility. We affirm.
1987 and 2002, respondent Esther Schmalz and her husband,
Marvin Schmalz, sold three parcels of farmland to their sons
by warranty deeds, reserving for themselves a life estate in
each parcel. In 2015, then 85-year-old Esther entered a
long-term care facility while 93-year-old Marvin continued to
reside at the couple's homestead property.
April 2017, Esther submitted an application for MA-LTC
benefits, after which Renville County conducted an evaluation
of the assets owned by Esther, the "institutionalized
spouse," and Marvin, the "community spouse,"
as a step toward determining eligibility. The county
determined that the couple's assets included homestead
property, a checking account, the cash value of
life-insurance policies, and the couple's life-estate
interests in the three parcels of farmland previously
conveyed to their sons. It is undisputed that the
couple's sons do not intend to purchase Esther and
Marvin's life estates and that there is no plan to sell
the three parcels of farmland.
appealed the results of the asset evaluation to the
commissioner of human services, challenging the inclusion of
the life-estate interests. A human-services judge held an
evidentiary hearing and issued a written order, adopted by
the commissioner, concluding that the life-estate interests
are non-excluded assets under state and federal law. The
order explained that, despite being assets under state and
federal law, the life-estate interests would not count toward
Esther's asset limit for MA-LTC eligibility-when that
determination was eventually made-because of an
"exemption" in Minn. Stat. § 256B.056, subd.
4a, for life estates. The commissioner affirmed the
county's asset evaluation and remanded for further action
on Esther's application.
remand, the county determined that Esther's
life-estate interests were not available assets for purposes
of determining eligibility, but that Marvin's
life-estate interests in the same parcels were available
assets. Because, after deducting the maximum community-spouse
asset allowance, the value of available assets ...