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Medicaid Eligibility – What is a “divestment” and why should I care?

Posted on Jun 11, 2019

The Medicaid application process uses various terminology to refer to eligibility requirements.  For example, what is a divestment?  A “divestment” is defined as any transfer of income, non-exempt assets, or homestead property belonging to the Medicaid applicant and/or his or her spouse for less than fair market value. Any divestment during the applicable look-back period triggers a period of Medicaid ineligibility, with certain limited exceptions.  The look-back period is 60 months and is measured from the date that the applicant is institutionalized and applies for certain Medicaid...

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Medicaid Eligibility – How do I know which assets to count?

Posted on May 24, 2019

As referenced our previous post, Medicaid 101 – What is it and who is eligible?, Medicaid applicants can have no more than $2,000 in available, non-exempt assets, which raises two questions: when are assets available, and which assets are exempt? An asset is “available” if: (1) the asset can be sold, transferred, or disposed of by or on behalf of the applicant; (2) the applicant is entitled to receive the proceeds from the sale of the asset; (3) the applicant can legally use the proceeds to provide for his or her support and maintenance; and (4) the asset can be made available in less...

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Medicaid 101 – What is it and who is eligible?

Posted on Apr 8, 2019

Medicaid, also known as Medical Assistance (“MA”) or Title XIX, is a health insurance program, jointly administered by the federal and state governments, for the benefit of certain elderly, blind, and disabled Wisconsin residents. Because Medicaid is essentially a welfare program, eligibility is subject to strict income and asset limitations. Income limitations depend on whether the applicant is single or married, whether the applicant is “categorically needy” (is already eligible for Social Security Income), and whether the applicant is “medically needy” (resides in a nursing...

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Dueling Estate, Gift, and Generation Skipping Transfer Tax Senate Bills

Posted on Mar 15, 2019

Earlier this year, two very different bills relating to the federal estate, gift, and generation skipping transfer (GST) taxes were introduced in the United States Senate. On January 17, 2019, Senator Tom Cotton (R-Ark.) introduced a bill that would reduce the federal estate, gift, and GST tax rates to a flat rate of 20%.  Under current law, these transfers are subject to a progressive tax rate that maxes out at 40% for transfers in excess of $1 million (subject to the federal lifetime exemption amount of $10 million, as adjusted for inflation). Conversely, the “For the 99.8 Percent...

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Disabled individuals are now ABLE to save – Achieving a Better Life Experience (ABLE) accounts

Posted on Mar 4, 2019

In 2016, the Wisconsin legislature adopted federal legislation allowing Wisconsin residents to participate in ABLE programs administered by other states (Wisconsin does not administer its own ABLE program). An ABLE account is a tax-advantaged savings account for the benefit of a blind or disabled individual. Importantly, the owner of an ABLE account does not lose his or her eligibility for means-tested government benefits such as Medicaid and Social Security, even if the balance of his or her ABLE account exceeds the asset limitation in place for the government program. Any Wisconsin...

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New year, new estate plan?

Posted on Jan 8, 2019

As we begin 2019, consider adding a review of your estate plan to your list of New Year’s resolutions. For most people, it is appropriate to review your estate plan every two to three years, or whenever a life-altering event occurs (e.g., marriage, divorce, a significant change in job or health, birth or adoption of a child). In addition, the following are a few non-tax reasons to review your estate planning documents: Children Need Powers of Attorney.  Any child of yours that has attained the age of 18 since you implemented your estate plan (especially those away at college) should have...

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