101 S Main Street, Fort Atkinson, WI 53538
101 S Main Street, Fort Atkinson, WI 53538
Medicaid helps millions of Americans pay for health care, long term care, and support services. In Wisconsin, like all states, Medicaid has a federal requirement called estate recovery. This means that after a Medicaid recipient dies, the state can seek reimbursement from their estate for certain benefits paid on their behalf. Estate recovery can influence family assets and inheritance, so understanding how it works is crucial for planning.
Medicaid estate recovery is the process by which the state attempts to recoup costs it paid for a Medicaid recipient’s care after that person dies. Under federal law, the state must seek reimbursement from the recipient’s estate for:
Long term care services
Other medical costs paid by Medicaid
The purpose of recovery is to return some of the program’s expenditures to the state so that funds can be used for others in need. This applies only where Medicaid has paid benefits that qualify for recovery and the individual’s estate has value.
Estate recovery applies only to Medicaid beneficiaries who are 55 or older when they receive benefits, and to those of any age who are permanently institutionalized. Permanent institutionalization generally means living in a nursing home or similar institution for a prolonged period.
In Wisconsin, like most states, the Department of Health Services reviews estates and pursues recovery when appropriate. The key factor is whether Medicaid paid for covered services that the state can recover.
In Wisconsin, an estate for recovery purposes typically includes:
Bank accounts
Investments
Personal property
Assets held in certain ways may or may not count toward the estate. For example, if the property is jointly owned or placed in certain trusts, it may pass directly to another person and not become part of the probate estate subject to recovery.
Not all assets are subject to Medicaid estate recovery. Wisconsin allows exemptions and exceptions, including:
Surviving Spouse
If a spouse survives the Medicaid recipient, estate recovery is generally deferred until after the spouse dies.
Minor or Disabled Children
If there is a child under age 21, or an adult child who is permanently disabled, recovery may be postponed or waived.
Hardship Waivers
The state may waive recovery when it would cause undue hardship. Waivers are not guaranteed, but can protect family property in some cases.
Certain Assets Outside the Estate
Assets that are legally owned by someone else, or otherwise excluded from the estate under state law, may not be reachable.
When a Medicaid recipient passes away, the state reviews the estate. If recovery is appropriate, the state files a claim against the estate through the probate process. The claim is paid along with other valid debts before beneficiaries receive their inheritance.
This process does not create a lien while the person is alive, except in very limited circumstances. Instead, recovery typically happens after death, once the estate is being settled.
Hein Law Office Elder Law & Medicaid Planning
Understanding Medicaid estate recovery is part of the overall picture, but it is distinct from qualifying for benefits in the first place. Medicaid eligibility planning focuses on income, assets, and meeting federal and state requirements so that someone can receive benefits. By contrast, estate recovery focuses on what happens to assets after death.
What is Medicaid estate recovery?
Medicaid estate recovery is the legal process by which the state seeks repayment from the estate of a deceased Medicaid recipient for certain benefits the program paid.
Does estate recovery apply to all Medicaid benefits?
No. It generally applies to long term care and related services. Other benefits like routine medical care are typically not subject to recovery.
Can the state take my home?
If the home is part of the Medicaid recipient’s estate and no exemptions apply, it could be subject to recovery. However, exemptions like a surviving spouse or minor child often protect the home.
Is there a lien on property while someone is alive?
In most cases estate recovery actions do not place a lien on property while the person is alive. Recovery usually occurs after death during estate settlement.
Are there ways to avoid estate recovery?
Certain legal strategies, exemptions, and hardship waivers may limit or eliminate recovery, but these depend on individual circumstances and must comply with state and federal law.
How do I get help with planning for Medicaid and estate recovery?
An experienced elder law or estate planning attorney can review your situation and help create a plan that respects your family’s needs and goals.
Hein Law Office, LLC
Elder Law, Estate Planning & Asset Protection in Wisconsin
Hein Law Office, LLC is a Wisconsin law firm dedicated to elder law, estate planning, probate, Social Security disability, and asset protection, helping families protect their future with trusted legal guidance.
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