The cost of nursing home care can be substantial, leaving many people wondering when Medicaid will cover long term care costs.  Medicare only covers a small amount of nursing home costs under limited circumstances.  As a result, many seniors will rely on Medicaid, provided they meet the financial eligibility requirements.  Below are some common “myths” about Medicaid eligibility.

Myth: You have to give away everything you own in order to qualify for Medicaid.

Truth: If you need nursing home care for other than a short-term rehabilitative stay, you will be expected to pay the private pay rate unless your assets are below a certain threshold as follows:

• A single applicant must have under $2,000 plus exempt assets;
• A married couple who both need care must have under $3,000 plus exempt assets;
• A married couple with one spouse who needs care and one spouse living at home can keep between $50,000 and $154,140.*

Exempt assets include a vehicle, personal property, a funeral trust, and life insurance if the death benefit is less than $1,500. If an applicant for Medical Assistance is married, the residence is not a countable asset as long as the spouse is living in it, and the retirement assets of the spouse in the community are also exempt.

Myth: You will be penalized for five years if you give anything away to qualify for Medicaid.

Truth:  Not exactly.  If you give money or property to your children, or to anyone else, you will be temporarily disqualified from Medicaid eligibility if the gift was made within five years of applying for Medicaid. The recipient of the gift is not required to return the money or property, nor are they otherwise liable for your care costs. The gift is called a “divestment” under the Medicaid rules.

• “Divestment” is the disposing of assets for less than fair market value. If an applicant for Medicaid has divested assets within five (5) years of applying for Medicaid, a disqualification period may result, which means that the institutionalized person will be ineligible for Medicaid for a period of time. The penalty period is calculated by dividing the total divested amount by the statewide average nursing home cost of care (currently $315.61 per day)* in effect at the time of the Medical Assistance application. This number is the number of days of disqualification.
• The start date for the period of ineligibility will be (in most cases) “the date on which the individual is eligible for Medical Assistance under the State plan and would otherwise be receiving institutional level care . . . but for the application of the penalty period.” 42 U.S.C. §1396p(c)(1)(D).

Myth: You may give $18,000 to each of your children as a way to protect it from the nursing home and it will not be a “divestment.”

Truth. Divestment includes transfer of any assets without any dollar limit. Assets are defined as “all income and resources of the individual or the individual’s spouse, including any income or resources which the individual or such individual’s spouse is entitled to but does not receive . . .” 42 U.S.C. § 1396p(e)(1).  The $18,000 gift amount is the amount that is exempt from gift tax reporting in 2024.*  There is no exempt amount for a divestment.

Myth: A revocable trust will protect your assets from the nursing home.

Truth. If income and principal are available to the Grantor, the assets in the trust are available to pay for nursing home care and are not protected. A special needs trust can be used to protect the assets of a disabled individual who is now receiving public benefits, or who may become eligible for benefits in the future.

Myth: If you are married and your spouse is in a nursing home, he or she can qualify for Medicaid if you put all of your joint assets in your name.

Truth: Assets are counted, regardless of which name they are in. Furthermore, Marital Property Agreements are disregarded for Medicaid purposes.

For answers to more Medicaid questions and concerns, consult with one or our experienced attorneys who practice in elder law and disability planning.

*Amounts change annually and are listed in this Article as of June, 2024.

We are often asked What is elder law? While the definition of “elderly” is the subject of some debate, the most common defining point is someone who is 65 years or older, as that is when federal Medicare benefits begin. Elder Law, much like “Family Law” or “Employment Law” is an umbrella term for a broad-based area of law.  For Elder Law attorneys, this consists of multiple areas of practice that relate to older adults, individuals with disabilities, and those who care for seniors and disabled individuals, including:

• Health Care and Legal Capacity
• Public Benefits (e.g. Medicaid and SSI)
• Special Needs Trusts
• Long Term Care
• Asset Protection and Nursing Home Planning
• Wills, Trusts, and Powers of Attorney
• Probate and Trust Settlements
• Guardianship and Conservatorship

The term Elder Law can be somewhat confusing because most Elder Law Attorneys also focus on solving legal problems for individuals with special needs, regardless of age.

The National Elder Law Foundation (NELF) defines Elder Law as follows:

“Elder Law” is the legal practice of counseling and representing older persons and persons with special needs, and their representatives about the legal aspects of health and long-term care planning, public benefits, surrogate decision-making, legal capacity, the conservation, disposition and administration of estates and the implementation of their decisions concerning such matters, giving due consideration to the applicable tax consequences of the action, or the need for more sophisticated tax expertise.”

NELF is the American Bar Association-approved agency that certifies attorneys as a Certified Elder Law Attorney (CELA). There are less than 15 CELAs in the state of Wisconsin. To become a CELA one must have enhanced knowledge, skills, experience, and proficiency in the field of elder law. The attorney must complete an exam and be certified by the National Elder Law Foundation Board. Attorneys must complete 75 hours of continuing education in the elder law field every five years.

If you or a family member require an elder law or special needs law attorney please contact our office.

As of January 1, 2023, Wisconsin law requires all new individual guardians to complete a state-approved training course. Prior to this year, Wisconsin only required corporate guardians to have formal training. Now every individual who is nominated to be the guardian of a person or of the estate (the assets and finances of the person) must complete training on a variety of topics, and submit a sworn, notarized affidavit attesting that the training has been completed before they can be appointed guardian.

Wis. Stat. § 54.26 sets forth the required areas of training, including the following:

• The duties and required responsibilities of a guardian under the law and limits of a guardian’s decision-making authority.
• Alternatives to guardianship, including supported decision-making agreements and
  powers of attorney.
• Rights retained by a ward.
• Best practices for a guardian to solicit and understand the wishes and preferences of a ward, involving a ward in decision making, and taking a ward’s wishes and preferences into account in decisions made by the guardian.
• Restoration of a ward’s rights and the process for removal of guardianship.
• Future planning and identification of a potential standby or successor guardian.
• Resources and technical support for guardians.

In most cases, it is a family member who is petitioning for guardianship of a loved one, and they often have misconceptions about what guardianship is or is not. Many are not aware of the responsibilities that they will have as guardian, or that there are a number of ongoing administrative requirements they will be required to complete. The court system is not equipped to provide guidance and advice to guardians on an ongoing basis, which can leave guardians feeling overwhelmed and lacking support. Training for guardians can be vital in helping guardians know what to expect and how to address concerns as they navigate their ongoing role as guardian.

The training must be completed no later than four days (96 hours) before the final guardianship hearing, and must be completed by the nominated guardian of person or estate, as well as any standby or successor guardians of person or estate. The training is free and available as a self-paced, online course. https://www.uwgb.edu/guardianship-training/

If you have questions on guardianships or the required training please reach out to one of our experienced attorneys.