Statute of Limitations for Creditors Claims Against an Estate Does Not Apply to TennCare

Amy J.L. Mason

In mid-November, the Tennessee Court of Appeals clarified an issue regarding the state's ability to file claims against the estate of an individual who previously received TennCare benefits at age 55 or older.  During the probate process, if an estate is probated within one year from the decedent's death, a notice to creditors is published in the local newspaper to inform all unknown creditors of the decedent's death and to remind them to file their claims against the estate with the court (please note: the personal representative directly notifies all known creditors).  Generally, all creditors must file their claims with the court within a four-month period beginning the first day of publication, otherwise the creditors' claims are lost forever.  For estates where no personal representative is qualified (i.e., the estate is not probated), suit must be brought or revived before the expiration of 12 months from the decedent's date of death. 

However, the Tennessee Court of Appeals recently concluded that claims brought by the Bureau of TennCare against an estate to recover benefits paid on behalf of the decedent may be filed outside the four- month window for creditors.  In this case, In the Matter of Daughrity, TennCare filed a claim against an estate to recover TennCare benefits paid on behalf of the decedent after the four-month creditors period expired.  Nonetheless, the Court of Appeals held that TennCare's claim against the estate was valid.  In the Court's opinion, the Tennessee rule is that when a claim is filed as a result of a governmental function, the state's claim is not barred by any statutes of limitations unless the legislature expressly provides that a particular limitations period applies to those types of claims.  The Court held that there was no legislative intent to bind TennCare to the four-month statute of limitations period for probate estates.  In a side note to the Court's opinion, the Court states that only the twelve-month statute of limitations period (beginning on the decedent's date of death) applies to the state's estate recovery claims.

If you have any questions about this bulletin or need additional information, please contact Dana Perry at (423)757-0228 or by email at dperry@cbslawfirm.com or Amy Mason at (423)757-0213 or by email at amason@cbslawfirm.com.