For many people, especially seniors, one of their greatest goals is to leave a legacy for their families, be it great or small. One key aspect of that legacy is their home, and one large threat to that goal is the prospect of a nursing home stay, and the resulting need for Medicaid benefits. “Is Medicaid going to take the house?” is an oft-asked refrain. The answer to this question may boil down to how much, and how well, they’ve planned.
Under federal law, each state must enact laws designed to recover from the estates of citizens who receive Medicaid assistance. The federal laws do not mandate the specifics of how the states should pursue recovery from estates, resulting in substantial variation in these programs from one state to the next.
Wisconsin has one the most vigilant and aggressive Medicaid estate recovery programs in the country. The Wisconsin program takes a two-prong approach. In addition to filing claims against the probate estates of deceased assistance recipients, Wisconsin takes the added step of filing liens on the homes of certain citizens who receive assistance.
With proper estate planning, including the appropriate use of trusts, one can significantly lessen the financial burden of receiving medical assistance. The use of irrevocable trusts can serve as a key element of an estate plan equipped to deal with the possibility of receiving Medicaid benefits.