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appealtrustrescission
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Troy v. Hart, 116 Md.App. 468, 697 A.2d 113

Facts

Paul Lettich, a Medicaid recipient, was entitled to an inheritance from his deceased sister's estate. His sister, Mildred Hart, assisted him in executing a disclaimer of this inheritance without informing him of the implications for his Medicaid eligibility. After Lettich's death, his personal representative, Richard Troy, filed a petition to rescind the disclaimer and remove Hart as the personal representative of the estate. The orphans' court denied the petition, leading to an appeal.

On 25 February 1995, Lettich's sister, Alta Mae Lettich (Alta Mae) died intestate, leaving an estate in excess of $300,000. To say that personal contact between Lettich and his sisters was sparse is hyperbole.

Issue

1. Did the procurement of Lettich's disclaimer by Hart constitute a breach of her confidential relationship with Lettich? 2. Was the disclaimer procured by undue influence? 3. Was Lettich's rescission barred by Estates and Trusts § 9–205? 4. Was Lettich's disclaimer contrary to Medicaid law and against public policy?

1. Did the procurement of Lettich's disclaimer by Hart [the decedent's sister] constitute a breach of her confidential relationship with Lettich? 2. Was the disclaimer procured by undue influence? 3. Was Lettich's rescission barred by Estates and Trusts § 9–205? 4. Was Lettich's disclaimer contrary to Medicaid law and against public policy?

Rule

The court applied the principles of undue influence, the validity of disclaimers under Maryland law, and the obligations of Medicaid recipients to disclose changes in financial status.

The right to disclaim property or an interest in it is barred by (1) an assignment, conveyance, voluntary encumbrance, or transfer of the property or interest, or a contract for any of those….

Analysis

The court found that Lettich's disclaimer was not procured by undue influence, as there was no evidence that his free agency was destroyed. The court also determined that Lettich's application for Medicaid did not constitute an assignment or transfer of his inheritance rights, thus the disclaimer was not barred by Estates and Trusts § 9–205. Furthermore, the court emphasized that Lettich had a legal obligation to notify the Department of Social Services of his inheritance, which he failed to do, rendering the disclaimer contrary to Medicaid law and public policy.

The circuit court further addressed appellant's claim of undue influence and found that appellant clearly did not establish that the free agency of Lettich was destroyed.

Conclusion

The court affirmed the lower court's decision, holding that Lettich's disclaimer was valid and that the estate would be divided among his surviving sisters. The court also noted that Lettich's failure to disclose his inheritance could lead to claims against his estate for any Medicaid benefits improperly paid.

The result of our decision today is that Lettich's disclaimer is valid under Est. & Tr. § 9–205.

Who won?

Mildred Hart prevailed in the case as the court upheld the validity of Lettich's disclaimer and denied the petition to remove her as personal representative.

Hart retained Robert Veil, Jr., Esq., to defend her.

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