Will planning change for Medicaid asset recovery?

When an Elder Law attorney works with  a client to plan how to reduce the frighteningly high costs of long term care, the goal is to help that client develop plans that result in the best care, using the best resources, for as long as possible, using every legal means at our disposal.  Planning tools used by many Elder Care attorneys often includes provisions for careful management of your assets and placement of those assets in different vehicles, including trusts.  We work with other trusted professionals, using several tailored strategies.  Some strategies have the effect of reducing your countable estate which can address both tax issues and qualification for public benefits, such as Medicaid.

In some states, Medicaid​ agencies have expanded powers to reach into your estate after your death to recover the funds they spent on your care.  ​It is an exciting and ever-changing see-saw battle between the legislators and advocates for planning.  As the advocates find a way to plan (which saves our clients some of their assets), the state legislatures find ways to reduce it (which saves Medicaid some of the costs).

Recent significant changes in Wisconsin took effect in August 2014.  These changes include the ability of Wisconsin Medicaid to reach into Family trusts and other non-probate assets to recover their costs.  “Probate assets” means those assets you own which are given to your heirs in your Will, such as the house, personal possessions, and funds or stocks that you own at your death.  “Non-probate” assets transfer directly to your beneficiaries and generally include such things as trusts, “pay on death” (POD) accounts, IRAs with beneficiaries, and life insurance, just to name a few common ones.   Reaching into non-probate assets is a new approach because those had traditionally been assumed safe from recovery.

The Wisconsin rules are interesting because they change the playing field in very important ways.  North Carolina does not have such far-reaching recovery , yet, but that could change over the next few years.  If you have had a plan set up in the past, we advise that you think about seeing your Elder Law attorney to check in.  If you are wondering about when to plan, our best advice is do it sooner rather than later!

Which method will protect your assets most effectively is hard to know without a crystal ball, but an Elder Law attorney can help you make the best plans that meet your needs … now and in the future.

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