In Hollman v. Department of Social Services, the South Dakota Department of Social Services provided Medicaid benefits to Darlene Hollman while she was in a nursing home. At that time, Hollman had an interest in real estate. DSS did not record a lien on the property for the benefits it had provided until after Hollman died. Hollman’s children contested the lien’s validity. The circuit court granted summary judgment for DSS, ruling that the lien had attached to Hollman’s interest in the property even though the lien was not recorded until after her death. The circuit court concluded that the lien recording requirement related to the question of priority between claimants rather than lien attachment. Hollman’s heirs appealed and the South Dakota Supreme Court reversed.
The Supreme Court found that DSS’s medical assistance lien did not attach to Hollman’s interest in the property before her death. Also, her interest passed to her children immediately upon her death. Because the lien had not been recorded at the time of her death, she had no interest upon which the lien could attach. Therefore, Hollman’s interest passed to her children free of DSS’s lien.
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