Co-Owner Cannot Reform Deed on Property Subject to Medicaid Estate Recovery

Reversing a lower court, a Michigan appeals court rules that there was no ambiguity in a deed conveying property to two men as tenants in common, so the court could not reform the deed to prevent the property from being subject to Medicaid estate recovery. In Re Estate of Steiner (Mich. Ct. App., No. 328628, Oct. 18, 2016).

Lyle and Steven Steiner owned property with a deed that conveyed the property to "Lyle F. Steiner, a single man and Steven M. Steiner, a single man." After Lyle died and Steven was appointed personal representative, the state filed a claim against Lyle's estate for unpaid Medicaid bills.

Steven filed a claim to reform the deed to the property to a joint tenancy with right of survivorship. Steven argued that Lyle intended that the property pass outside of probate. The trial court ruled that the deed created a tenancy in common, but that evidence of Lyle's intent created a latent ambiguity in the deed. The court reformed the deed, and the state appealed.

The Michigan Court of Appeals reverses, holding that the deed clearly creates a tenancy in common and there was no latent ambiguity in the deed, so it should not have been reformed. The court rules that "the deed terms, as applied and executed, do not create the necessity for interpretation or a choice among two or more possible meanings. Here, the language conveying the property suggests a single meaning--that a tenancy in common was created."

For the full text of this decision, go to: https://publicdocs.courts.mi.gov/OPINIONS/FINAL/COA/20161018_C328628_22_328628.OPN.PDF

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