On August 14, 2011, Iowa resident Willber Thomann murdered his wife JoAnn and then committed suicide. At the time of their deaths, the couple owned farmland and bank accounts in joint tenancy.
Under wills both spouses had executed in 1990, the survivor would receive all property owned by the first spouse to die. Since JoAnn had died first, Willbur would have inherited her share of their property shortly before killing himself, but Iowa’s “slayer’s statute” prevents a murderer from inheriting anything from his or her victim.
The executor of JoAnn’s estate requested a determination that all jointly held property of the couple was the property of JoAnn’s estate pursuant to the slayer’s statute. A district court agreed and held that JoAnn was the surviving owner of all jointly owned property as though Willbur had predeceased her. Willbur’s heirs appealed, arguing that the statute treats a murderer as predeceasing his victim concerning only the victim’s property. In other words, the statute did not force Willbur to forfeit his own interest in jointly held property. It merely prevents him from inheriting the interest of JoAnn.
The Iowa Supreme Court agreed with this interpretation and reversed the district court’s ruling.
In the Matter of the Estate of Thomann (IA Sup. Ct., No. 70 / 01-0664, 7-17-62)
Trust Designed to Protect Eligibility Still Countable
The Colorado Court of Appeals recently ruled that the assets of a trust created to hold a Medicaid beneficiary’s share of her husband’s estate are available to pay for her care, even though the trust was set up to protect her Medicaid eligibility.
A probate court established an elective-share trust for the benefit of Ruby Faller, an incapacitated Medicaid recipient, after the death of her husband. The trust was to receive any assets passing to Ruby from her husband, which amounted to $96,134. Any distributions from the trust would be restricted to protect her Medicaid benefits. The probate court also ruled that the trust property was not Ruby’s property and was not available to pay for her care.
The Colorado Department of Health Care Policy (DHC) appealed, contending that the probate court had erred. The trust assets, DHC argued, were countable in determining Ruby’s eligibility.
The Colorado Court of Appeals agreed and reversed the probate court’s ruling. According to the Court, state law only allows three types of trusts to be created for the specific purpose of maintaining eligibility for public benefits—income trusts, disability trusts, and pooled trusts. Each of these trust provisions states that “no person is entitled to payment from the remainder of the trust until the state medical assistance agency has been fully reimbursed for the assistance rendered to the person for whom the trust was created.” Ruby’s elective-share trust was not such a trust, and its assets are therefore countable.