Many Americans are recipients of government benefits, whether offered by their state government or the federal government. According to the Center on Budget and Policy Priorities, approximately 64 million Americans received social security benefits in June 2020. Some government programs have been granted special privileges through legislation allowing for the recuperation of benefits paid out. MassHealth, the Massachusetts program combining the Children's Health Insurance Program and Medicaid, enjoys the ability to pursue reimbursement from a beneficiary's estate pursuant to Massachusetts General Laws (M.G.L.) chapter 118E, section 31. However, in a recent opinion from the Massachusetts Supreme Judicial Court ("SJC"), MassHealth was prevented from recovering against an estate.
The decedent received over $100,000 in benefits under the MassHealth program after attaining age 55. The decedent died in August of 2014 without a valid will and owning a fifty percent (50%) interest in real property located within the Commonwealth of Massachusetts. After filing a petition for Late and Limited Testacy in May of 2018 and notifying MassHealth, the decedent's petitioning heir was advised that MassHealth would seek reimbursement from the estate. However, by this time the "ultimate time limit" proscribed by Massachusetts Uniform Probate Code (MUPC) Section 3-108 had already lapsed.
The court honed in on four questions arising out of the above facts which needed to be answered. First, are MassHealth claims excepted from the prohibition on paying claims after three years imposed by Section 3-108? Second, does MassHealth's authority under M.G.L. ch. 118E, Section 31 extend to "late and limited" petitions and, if so, whether MUPC Section 3-805 authorizes the personal representative to pay such claims? Third, whether MassHealth's authority under MUPC Section 3-803(f) is subject to the one-year time limit under Section 3-803(a). Lastly, if MassHealth is not granted an exception under Section 3-803(f), may MassHealth commence a formal testacy proceeding in furtherance of obtaining reimbursement?
In response to the first question, the SJC refers to the legislature's intent when enacting the MUPC to facilitate quick and efficient liquidation of estate assets for distribution to beneficiaries. Additionally, the SJC relies on the absence of language effecting an exception to the ultimate time limit as evidence of the legislature's intent to bind MassHealth to the three-year period. As for MassHealth's authority to pursue recovery, the court held that such authority does not override the statutory limitations relating to late and limited petitions. Specifically, a personal representative under a late and limited petition is permitted to hold property of the estate solely for the purpose of confirming title in the beneficiaries. Finally, the court held that Section 3-803(f) is an exception to the one-year limit imposed by subsection (a) and as such, an answer to the fourth question is unnecessary.
In holding that MassHealth is not exempt from the ultimate time limit, the SJC also considered the possibility that heirs will delay petitions. If successful, creditors would be precluded from presenting claims against the estate. However, creditors are provided their own avenues to present claims and may even open the estate proceedings themselves as interested parties under MUPC Section 1-201(24).