In 2014, the rules regulating the Wisconsin Estate Recovery program were updated to allow Medicaid and other long-term care insurance programs to recover funds from recipients of such coverage after they have passed on by claiming parts of their estates. This was part of Wisconsin Act 20, which covered state finances and appropriations regarding the 2013 legislature's budget. The money recovered through this program is used to support Medicaid and other similar programs such as BadgerCare Plus, Community Options Program, and services provided by the Wisconsin Chronic Disease Program.

In Wisconsin, approximately 50 percent of the state's Medicaid budget is spent on long-term care services. By reinvesting some of its recipients' money into the program, Medicaid can continue to provide quality long-term care for Wisconsin residents.

Medicaid has provided long term care for the Elderly (65 years or older), blind and Disabled for individuals is a Skilled Nursing Home for many years. Today, a Wisconsin resident who is currently a member of the Wisconsin Chronic Disease Program, 55 years old or older, and enrolled in Medicaid or BadgerCare Plus may be affected by this change. If you are part of any of these groups or know you will be in the near future, talk with a trusted estate planning attorney about how this change will affect you. Wisconsin will be able to make a claim on your Estate at death for reimbursement for money the state has spent for your care. This rule does not require that proceeds from individuals' estates pay back for all services received. It governs long-term care services, assistance provided through Family Care, the Community Options Program (COPS), and Badger Care Plus to individuals that are able to remain in the community and avoid institutionalization as well. If you receive assistance through one of these programs, you could be required to pay back into it through your estate.

The Wisconsin Estate Recovery program is handled by the Wisconsin Department of Health Services.

Exceptions to the Rule

There are certain circumstances under which an individual's heir, beneficiary, or business partner may apply for a waiver to prevent the program from seizing money from his or her estate. These circumstances are scenarios where the individual's heir, beneficiary, or partner would face a significant financial hardship if the state recovered some or all of the deceased's estate. Examples of valid scenarios for such a waiver are as follows:

  • If the department recovers money from the deceased's estate, his or her beneficiary, heir, or partner would become or remain eligible for FoodShare, BadgerCare Plus, Social Security Income, or Medicaid benefits.
  • The deceased's estate includes real estate that provides income for the individual's heir, beneficiary, or partner. An example of this type of real estate is a working farm.
  • The deceased's partner, heir, or beneficiary is currently receiving veterans’ benefits or general financial relief.

While planning your estate with your attorney, bring up these issues with him or her to learn more about how your family, business partner, or other beneficiaries may be affected by your death. He or she will know how your beneficiaries may apply for a hardship waiver if it is necessary to do so.

What Types of Assets are Affected?

The following assets may be recovered to pay for individuals' long-term care costs.

  • Marital property. Recovery payments may come from 50 percent of a surviving spouse's estate.
  • Revocable trusts. Any revocable trusts made on or after August 1st, 2014 are available for estate recovery.
  • Life estates. Recovery payments may come from any life estates created on or after August 1st, 2014.
  • Joint tenancy property. Any joint tenancies established on or after August 1st, 2014, may have recovery payments taken from it. These payments come from the deceased's interest in the property at the time of his or her death.
  • Capitation payments. Repayment may come from an individual's entire capitation payment made to a managed care organization beginning on August 1st, 2014 if he or she participated in a long-term care program.
  • Any service received while participating in a long-term care program. Any eligible individual who took advantage of a long-term care program after August 1st, 2014 may have money recovered from his or her estate through the Wisconsin Estate Recovery program.
  • Life insurance policies. Any life insurance policy opened on or after August 1st, 2014 may be partially recovered by the program.
  • Tax Equity and Fiscal Responsibility Act (TEFRA) liens. Any TEFRA liens created on or after August 1st, 2014 may be used to cover costs for the program.
  • Other non-probate property. Any non-probate property not mentioned above may be used to repay the program if its owner died on or after August 1st, 2014.

Milwaukee Estate Planning Lawyer

These changes to the Wisconsin Estate Recovery program can bring dramatic changes for you and your family. Don't let your beneficiaries lose out on your financial support after you pass away. Contact the Law Office of Rollie R. Hanson, S.C. to discuss your concerns with an experienced Wisconsin estate planning attorney. By understanding the changes this law brought and educating yourself about what it means for your estate, you will be able to effectively draft a will that meets all your beneficiaries' needs.