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High court rules in Fairfax case

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news Mitchell, 57301
Mitchell South Dakota 120 South Lawler 57301

BURKE -- The South Dakota Supreme Court has ruled a deceased man's wife, who is committed to a nursing home and excluded from her husband's will, still has a right to half her husband's estate.

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The case arose after the death of Eugene Shipman, of Fairfax, on July 31, 2010. Shipman's wife of more than 50 years, Arline Shipman, had been in a nursing home since 2008 because she suffered from dementia and needed full-time care, according to the Supreme Court's summary of the case.

In 2009, the couple sought Medicaid assistance for Arline Shipman's nursing home care, but were denied because their financial resources were too high, the summary says. After the couple spent down their combined resources, they reapplied for Medicaid and were approved.

The spend-down represented nearly $100,000 the couple spent on Arline Shipman's care before the couple qualified for assistance, the summary says.

In Eugene Shipman's will, the summary says, "Eugene disinherited his wife because he stated he 'had given her sufficient consideration during his lifetime,' " and half of his estate was left to his son, David Shipman, and the rest to his four grandchildren.

The value of Eugene Shipman's estate after his death was about $450,000, said Special Assistant Attorney General Jeremy Lund during his oral argument on the case in March.

Though she was excluded from her husband's will, Arline Shipman was still entitled under state law to an elective share of her deceased husband's estate. But the couple's son David Shipman, acting with his mother's power of attorney, disclaimed that elective share "due to the fact that (Eugene Shipman) had taken care of her and paid for her nursing home care," the summary says.

David Shipman, acting also as the personal representative of his father's estate, notified the state Department of Social Services that his mother had been disinherited. In turn, the department notified Arline Shipman that she must pursue her elective share to continue to receive Medicaid.

A legal guardian was appointed to represent Arline Shipman. In October 2010, the guardian petitioned the court to set aside the disclaimer and grant the elective share, but Judge Kathleen Trandahl denied the request.

In a decision issued Wednesday, the Supreme Court found Trandahl was mistaken to allow the financial support Arline Shipman received from her husband while he was still alive to be counted as her elective share of her husband's estate.

"Under the circuit court's reasoning," the summary says, "an estate of any deceased spouse could claim that other ordinary forms of support (food, clothing and shelter) provided during the marriage satisfied the surviving spouse's elective share."

The Supreme Court found Trandahl was also mistaken when she denied Shipman's legal guardian's request to set aside the disclaimer and grant the elective share because, Trandahl found, it would hurt those set to receive Eugene Shipman's inheritance through his will.

"Those beneficiaries had no predetermined right to an inheritance that was free of Arline's elective share," the decision says.

The Supreme Court reversed Trandahl's ruling and sent the matter back to circuit court to allow Arline Shipman to claim an elective share of her husband's estate.

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