Supreme Court to decide Fairfax couple's plan for Medicaid nursing home care

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Area family dispute goes to SD Supreme Court

SUBHEAD

Gregory County case involves deceased man’s estate

VERMILLION -- The South Dakota Supreme Court heard oral arguments Wednesday on a Gregory County case involving a dispute over the distribution of a man’s estate between his wife, who is committed to a nursing home, and other family members.

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 required full-time care, according to a summary of the case provided by the state Supreme Court.

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

The “spend down” represented about $100,000 that was spent on Arline Shipman’s care before the couple qualified for assistance, said Special Assistant Attorney General Jeremy Lund during his oral argument. Lund is representing the South Dakota Department of Social Services in the case.

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 total value of Eugene Shipman’s estate after his death was about $450,000, Lund said.

Despite the will, Arline Shipman was still entitled under state law to an elective share of her deceased husband’s estate -- except, her son David Shipman, acting with his mother’s power of attorney, disclaimed the elective share “due to the fact that (Eugene Shipman) has 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, and, 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, and 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.

Before the state Supreme Court on Wednesday, Lund argued the family was merely worried Arline Shipman’s needs would “eat up the inheritance,” and were now “trying to shift the cost to the taxpayers through Medicaid.”

“That’s unfair,” he said.

Lund asked the Supreme Court to vacate Judge Trandahl’s decision and allow Arline Shipman to revoke her disclaimer and claim an elective share of her husband’s estate.

“If the department wins, the department doesn’t receive any of the money in the elective share. It goes to Arlene,” he said. “But, it’s not paying Medicaid on her behalf when there is another source available.”

Attorney Jack Gunvordahl, of Burke, is representing Eugene Shipman’s estate in the case.

“Money that was used for (Arline Shipman’s) care is part of the estate,” Gunvordahl said. “Her estate was used up in caring for her, so she shouldn’t be entitled to double dip.”

The couple’s marital assets and Arline Shipman’s share of her husband’s estate, were used for her long-term care, Gunvordahl said.

Trandahl’s decision should stand, Gunvordahl said, because Arline Shipman was excluded in her husband’s will, she chose not to claim her elective share and she already received her fair share for her long-term care.

Lund rejected Gunvordahl’s argument and said Arline Shipman had been “artificially impoverished” to qualify for Medicaid.

“They’re trying to save money for the kids to inherit,” Lund said. “That’s contrary to public policy.”

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