IN THE MATTER OF THE ESTATE OF JILL A. JORDAN, Deceased.
IOWA MEDICAID ENTERPRISE ESTATE RECOVERY PROGRAM, Respondent-Appellee. ESTATE OF JILL A. JORDAN, Petitioner-Appellant,
from the Iowa District Court for Cerro Gordo County, DeDra L.
estate appeals from the district court's order granting
summary judgment in favor of the Iowa Department of Human
Services on the estate's petition for declaratory
judgment regarding the payment of an annuity.
H. Skilton of Cronin, Skilton & Skilton, P.L.L.C.,
Charles City, for appellant.
J. Miller, Attorney General, and Matthew K. Gillespie,
Assistant Attorney General, for appellee.
by Vogel, P.J., and Vaitheswaran and McDonald, JJ.
decide whether an annuity purchased by a woman and listing a
state agency as beneficiary should have been included in the
deceased woman's estate.
facts are essentially undisputed. Jill Jordan received $378,
057.13 of medical assistance from the Iowa Department of
Human Services. As a condition of eligibility for the public
assistance, Jordan named the department primary beneficiary
of a fifteen-year annuity she purchased for $75, 000. Jordan
passed away during the fifteen-year period. The insurer that
issued the annuity transferred the remaining balance of $60,
283.80 to the department.
Jordan's will was admitted to probate for small estate
administration. Under the will, Jordan's debts allowable
against her estate included the expenses of her "last
illness and burial." A funeral home filed a probate
claim for $7566.22. The estate lacked sufficient funds to pay
administrator of the estate filed a petition for declaratory
judgment seeking to include the "disputed annuity"
in the estate. The department moved for summary judgment
on the ground that it "was the 100% primary
beneficiary" and, accordingly, the estate had "no
interest in the annuity funds." The district court
granted the department's motion after finding as follows:
At the time of death, the decedent owned an annuity, which
paid out income monthly to the decedent and still left the
decedent eligible to receive medical assistance. [The
department] was the sole beneficiary of the annuity, and, as
such, the estate of Jill Jordan has no interest in the
annuity funds. The annuity can only be brought into the
estate if [the department] had a claim against the estate
through its estate recovery program and [the department] was
not the primary beneficiary of the annuity. Both of these
factors are not met, and, accordingly, the annuity is not an
asset of the estate.
court denied the estate's request for reconsideration.
appeal, the executor of the estate contends "the annuity
contract is void" because it "violates a clear
public policy on priority payment of claims." The
executor cites Iowa Code section 633.425 (2017), which ranks
"[r]easonable funeral and burial expenses" above
"[a]ny debt for medical assistance." In the
executor's view, the department "prioritized itself
above all other claimants under [section] 633.425 and [was]
complicit in the agreement to enforce same by not allowing
[the annuity] to be used to pay priority claims."
See Iowa Code § 633.426 ("Payment of debts
and charges of the estate shall be made in the order provided
in section 633.425, without preference of any claim over
another of the same class. If the assets of the estate are
insufficient to pay in full all of the claims of a class,
then such claims shall be paid on a pro rata basis, without
preference between claims then due and those of the same
class not due."). Our review is for errors of law.
See In re Estate of Renwanz, 561 N.W.2d 43, 44 (Iowa
In re Estate of Myers, 825 N.W.2d 1, 2 (Iowa 2012),
the Iowa Supreme Court was asked to decide "whether a
surviving spouse's elective share . . . include[d]
pay-on-death [(POD)] assets." The court held, "POD
assets are not included in the surviving spouse's
elective share" under the applicable statute.
Myers, 825 N.W.2d at 6. The court reasoned they were
"nonprobate assets" and "[n]onprobate assets
are interests in property that pass outside of the
decedent's probate estate to a designated beneficiary
upon the decedent's death." Id. The court
continued, "Although these assets are the personal
property of the grantor before death, they become the
personal property of the ...