The Wisconsin Estate Recovery Program seeks repayment for the cost of certain long-term care paid by programs such as Medicaid, BadgerCare Plus, and Family Care. Recovery is made from the assets of a recipient after their death, or after the death of their surviving spouse. Over the years, the state has become increasingly aggressive in recovering more and more assets after the deaths of people who have received long-term care benefits. Estate Recovery often comes as a surprise to surviving family members, when they learn the state often has the right to recover a significant portion of a deceased person’s assets.
What People are Affected by the Estate Recovery Program?
- Medicaid and BadgerCare Plus members of any age who have lived in nursing homes paid for by Medicaid or have received inpatient hospital benefits for 30 days or more.
- Medicaid and BadgerCare Plus members aged 55 years or older who received benefits for skilled nursing services and many home health care services.
- People aged 55 years or older who receive services from one of several long-term care programs, including Community Options Program Waiver, Family Care, and Community Opportunities and Recovery.
- Members of Wisconsin Chronic Disease Program (WCDP), and Community Options Program members who are over age 55.
When will Estate Recovery seek to recover benefits?
The Estate Recovery Program will seek to recover its payments after the death of a recipient, unless that recipient is survived by a spouse or a minor child. In that case, Estate Recovery will wait until after the subsequent death of the surviving spouse or dependent. The Estate Recovery program will place liens on real estate of recipients of long-term nursing home benefits.
What Assets Can Estate Recovery Obtain?
The Wisconsin Estate Recovery Program can recover funds from a surprising number of different assets of a deceased person.
- Probate Assets. If a Formal or Informal Probate Administration is opened, the Personal Representative will be required to give notice to the Estate Recovery Program, which will then file a claim for recovery.
- Transfer by Affidavit Assets. Transfer by Affidavit can be used when the deceased person had under $50,000 of probate assets. When a surviving family member completes a Transfer by Affidavit, they are required to send a copy by certified mail to the Estate Recovery Program, which will then determine whether it has a lien.
- Real Estate. After the death of a recipient, Estate Recovery will place a lien on real estate. However, Estate Recovery will not pursue the lien as long as the property is owned by a surviving spouse.
- Life Insurance Policies established after August 1, 2014. This is a recent change that further broadened the power of Estate Recovery to obtain assets. Even though a life insurance payout is a non-probate asset, it can still be recovered by estate recovery if the policy was created after this date.
- Jointly-Held Checking and Savings Accounts. This is perhaps the most surprising and most severe provision. If a decedent had owned a bank account jointly with another person, such as a sibling or an adult child, Estate Recovery has the right to recover funds out of that account, even though there is a surviving joint owner. This, incidentally, is one of many reasons why a person should be very thoughtful when considering adding a non-spouse as a joint owner of a bank account.
- Revocable Trusts created after August 1, 2014. If properly created and funded, a Revocable Trust will successfully avoid the need for a probate proceeding and will avoid the claims of many creditors. However, Revocable Trusts do not escape Estate Recovery.
In What Order Will an Estate Recovery Claim be Paid?
If Estate Recovery makes a claim during a Probate Administration or in response to a Transfer by Affidavit, it will be paid pursuant to a particular order of priority. Costs that will be paid before the Estate Recovery Claim are:
- Costs of administering the estate, including attorney fees
- Reasonable funeral and burial costs
- Costs of the “last illness” that were not covered by insurance
For further questions about the Wisconsin Estate Recovery Program, or for assistance resolving an Estate Recovery lien, contact Lippow Law Offices, LLC.