Family may lose home to Estate Recovery

GLENN, Mich. (WOOD) - Families dealing with the death of a parent are finding that her will doesn't matter. The State of Michigan has cut in line to get the proceeds of her estate.   

Lillian Collins' family was supposed to keep her home near Glenn in Allegan County -- which has been in the family since 1950 -- after she died last year at age 84. Now, instead, the State of Michigan wants it.

Shirley Logsdon and her brother were shocked when they found out that the will their mother left didn't matter. The siblings were supposed to inherit the house but now the state has gone to the Michigan Probate Court and put a lien -- a claim on property to settle a debt -- on it.

"They're asking for $35,000," Logsdon told 24 Hour News 8.

That's because Lillian Collins spent the last year of her life in a nursing home and was covered under Medicaid.

Since July 2011, the state has been enforcing the Estate Recovery Law. The law aims to recoup taxpayer money from individuals who received long-term Medicaid care. 

"My brother is 62 years old," said Logsdon. "He's getting ready to retire. The house was willed to him. We both knew the property was willed to both of us and now if the State of Michigan takes this property, he'll be kicked out on the road. He has no place to go."

Elder law and estate planning attorney David Carrier said the state is trying to get what money it can.

"They're looking under the cushions for the loose change," said Carrier.

Carrier said some states have had similar laws for years, but have recovered little money for the taxpayers.

"Less than 1%," said Carrier. "This is not a solution to 'How do we pay for long term care?'"

Carrier says he was surprised when the state decided to try estate recovery because it applies only to cases that go thru Probate Court and there are ways to avoid that, such as using Trusts to preserve assets for the family.

"There are ways to hang on to the house, but you have to plan," said Carrier. "You don't get any do-overs."

There are some hardship exemptions in the recovery law, but so far Logsdon has been told they don't apply in her case.

The family has appealed and is waiting for a hearing date -- possibly the first since the state has started enforcing the law.