As 2007 began, Arthur Brown, who was then seventy-eight years old, and his wife, Mary, lived together in a jointly-owned condominium. Several months later, Arthur began living in an assisted living facility. The following year, Arthur was admitted into a nursing home after he was diagnosed with Alzheimer’s disease. Soon thereafter, Arthur applied for nursing home Medicaid benefits.

Mary executed a Last Will and Testament in 2007. Mary excluded Arthur as a beneficiary under her Will, and instead named her three adult children as her residual beneficiaries. Arthur and Mary also executed a deed transferring Arthur’s interest in the condominium to Mary.

The Medicaid agency conducted a resource assessment of Arthur and Mary as a married couple and determined that they had $141,732.24 in total countable resources, that Mary had $70,866.12 in protected community spouse assets and that Arthur had to spend-down $70, 866.12 before he would be eligible for Medicaid benefits. The condominium and an automobile were deemed to be exempt resources for purposes of establishing Arthur’s Medicaid eligibility. After spending down his share of the couple’s resources, Arthur became eligible for Medicaid.

Mary died in 2010. The assets in her estate included the proceeds from the sale of the condominium, bank accounts, and stock that was transferred to her after Arthur submitted his first Medicaid application. In November 2010, the Brown’s son Thomas notified Medicaid of Mary’s death.

The following month, the Medicaid agency inquired whether Arthur would claim his one-third elective share of Mary’s estate. Pursuant to N.J.S.A. 3B:8-1, a surviving spouse is permitted to claim the minimum amount of a deceased spouse’s estate available to him/her under New Jersey law, amounting to one-third of the deceased spouse’s estate.  Thomas responded that the elective share statute did not apply to Arthur. Consequently, the Medicaid agency notified Thomas that Arthur’s Medicaid benefits would terminate. Thomas requested a Fair Hearing on Arthur’s behalf. Arthur died in 2013, three years after his wife died, but before the Fair Hearing was conducted.  Arthur’s estate did not pursue the Fair Hearing.

Soon after Arthur’s death, Medicaid filed a lien claim under the estate recovery program against all the assets in Arthur’s estate, including Arthur’s elective share against Mary’s estate that included the proceeds from the sale of the condominium. Under the estate recovery program, the Medicaid agency seeks to recover assets from the estates of all deceased Medicaid recipients who received Medicaid benefits on or after age 55.

Thomas filed a complaint in the Chancery Division, Probate Part, on Arthur’s behalf for judgment discharging the Medicaid lien. Thomas contended that Arthur had no right to an elective share of Mary’s estate based upon four arguments. First, Thomas argued that N.J.S.A. 3B:8-1 did not apply to Arthur because Arthur and Mary had been living separate and apart at the time of her death, and the couple ceased to cohabit as man and wife under circumstances that gave the wife a cause of action for divorce. Second, Thomas argued that the decedent’s estate had no right to an elective share because that right was personal to him and could only be exercised during his lifetime. Third, Thomas argued that the decedent’s elective share was zero because the proceeds from the sale of the former marital home were excluded from the wife’s augmented estate. Finally, Thomas argued that the value of some of the decedent’s assets should be deducted from his elective share

The Chancery Court judge heard and rejected each of Thomas’s arguments alleging that Arthur had no right to an elective share. Thomas then filed a motion for reconsideration which was also rejected. On appeal, the appellate division upheld the decision of the Chancery Court judge.

The opinion is annexed here – 

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