Playing Keep Away: Exempt Assets

Efficient planning for Medicaid qualification often feels like a game of “keep away”. What is the State going to be able to keep, and what can a person keep safe? One of the most important ways to plan for Medicaid qualification is determining which assets, if any, are exempt from inclusion in a person’s assets, or in the assets that a spouse is able to retain. Many people don’t understand what can be retained, and what doesn’t count at all when making an application for Medicaid. The most commonly exempt assets for a single person are:

-$2,000.00 cash;

-pre-paid burial and funeral arrangements and;

-personal property (clothing, electronics, household items, etc.).

For the spouse not on Medicaid, in addition to the above items:

-homestead property (house and all contiguous land);

-one vehicle, and;

-all of the community spouse’s retirement accounts.

As with any and all topics involving Medicaid, there are several quirks, nuances and exceptions to consider. There are several other potentially exempt assets (as well as “unavailable” assets which is the subject of a different article) depending on each individual situation. For example, this article does not discuss the additional assets that the spouse is allowed to retain (which I do not consider “exempt” for these purposes.)

Planning ahead, and shifting of assets from non-exempt to exempt can be a great way to retain as many of your hard-earned assets as possible. Just as in a game of keep away, timing can be vitally important. Doing something too early, or too late, can result in you or your loved one losing the game.

The Probate Boogeyman

A common theme we hear from our estate planning clients is, “I hear Probate is terrible, and I want to avoid it”. Most of the time, after further discussing the client’s wants and needs, it becomes obvious the person didn’t have any idea what probate was, or why they should or shouldn’t be afraid of it.

Probate is the Court-supervised legal process by which the “Probate” Court determines that a decedent’s will is valid, determines who will be in charge of administering the estate (in Wisconsin that person is called a Personal Representative), determines who the decedent’s heirs are, determines what assets the decedent had at his/her death (that are subject to probate), and determines whether the Personal Representative ultimately distributed the property correctly. Probate is a very common occurrence. Are there downsides to Probate? Absolutely. While every case is different, the common problems with probate are that it tends to take longer to complete than other methods (usually 6 to 12 months), there are court fees associated (.2% of the total value of the Estate), and Probate is a public record with most probate records readily accessible over the Internet. Depending on the circumstances of the case, a probate also makes it easy for disgruntled “heirs” to have a venue to battle over an estate, or for claims to be made. In addition, notification requirements can be cumbersome if there are many or unknown heirs. Most people that are afraid of probate know someone that has been through a messy probate, or have dealt with one themselves.

There are good things about probate. The positives of probate are it gives a clear and defined procedure to settle disputes, it creates a more open environment and it ensures that everything is administered properly. While I’m generally an advocate of avoiding probate, there are times where the increased costs of that type of planning (trusts, etc.) don’t make sense for a client. Probate can certainly be a bad thing, but it isn’t always something one needs to lose sleep over. The most important thing is that the client receives the proper estate plan for them, which may or may not involve probate.


Donald Trump is set to be inducted as the 45th President of the United States on January 20, 2017. One of the things he has pledged to do is repeal the Affordable Care Act (aka “Obamacare”). The actual plan is currently unknown, but it can be safely assumed that something will change. The Affordable Care Act is a tremendously complex set of legislation and executive orders, and trying to discuss every aspect of what might change is a fool’s errand. I want to touch on possible changes to Medicaid. Medicaid is the program whereby the state, with the assistance of the federal government, provides health care for those that cannot afford it. In Wisconsin, it takes on many forms in its subprograms (e.g. Badgercare, Family Care, Institutional Long Term Care, etc.).
President Trump may be proposing to change a portion of Medicaid to provide “block grants”. Essentially, instead of the Federal Government directly funding a portion of Medicaid on an as needed basis, it would provide a specified amount of funds to each state each year, and the state would administer the programs alone. Because the federal government currently pays more for Medicaid than the state typically does, there are fears that the funds would be mismanaged by the states, or that states will pass more stringent laws to limit Medicaid eligibility. If that happens, it would likely create a gap where people who need and can’t afford health care also can’t receive it at a free or reduced cost because they don’t qualify. Proponents say that giving states autonomy will help them to reduce overall healthcare costs. Time will tell what effect any possible changes may have.

What is Elder Law?

As someone who practices in the area of “Elder Law” I am often asked. What is elder law? The purpose of this article is to answer that question. Elder Law generally describes the clients that an elder law attorney works with: people on various spectrums of the aging process, and their families. An Elder Law attorney uses a collaborative approach, working with other professionals to ensure that a client’s unique needs are being met. This includes working with financial advisors, CPAs, banks, trust companies, insurance agents, medical professionals, social workers and case workers.

An Elder Law attorney also practices in a wide variety of areas in order to meet the client’s needs. Some of these areas include: estate planning, long-term care planning, trust administration, probate and guardianships. These areas often overlap, and include some areas that most regular estate planning attorneys provide. The difference is that an elder law attorney has a specialized focus on the issues that pertain specifically to aging clients, and how to best serve them now and in the future.

The “Cool Parents” Win

An interesting case was decided recently, on an issue that most Wisconsinites have
dealt with either as a young person growing up in the state, or as a
parent.  Wisconsin Courts decided
that until the State Legislature says otherwise, adults are allowed to allow underage
drinking parties at their homes.  (There
could still potentially be liability for the aftermath of said parties, but
that is a topic for a different article). Currently, state statute
does not allow a county or municipality to legislate on alcoholic beverages
unless the law strictly conforms with state law.  In this case, the Court of Appeals ruled that
a county ordinance prohibiting adults from hosting underage drinking parties at
their homes was stricter than the state ordinance which prohibits said parties
at a “premises” owned by the adult.  “Premises”
is defined elsewhere in state statute as a “licensed premises” which is
generally a tavern or liquor store.  As a
result, the parents prevailed.  It seems
unlikely that the state legislature intended this result when the laws were
written, but Wisconsin does have some of the most relaxed alcohol laws in the
country.  Given the culture of drinking
by people of all ages in Wisconsin, and the unfortunate results that sometimes
occur, I believe this may be on the State’s legislative agenda in the coming
session.  This is a good example of how a
single word in a law (or document) can completely change its meaning.

Medicaid Planning: Don’t Let the Nursing Home Get All Your Money

Medicaid Planning is a complex, and ever-changing exercise.  If you’re like many estate planning clients that I have met, I bet you “don’t want the nursing home to get all your money.”  There are many ways that Medicaid planning can be accomplished to make sure your heirs inherit your estate, rather than having those funds paid to a long-term care facility.

While planning ahead with a solid estate plan is perhaps the most important aspect of Medicaid planning, the application and qualification process for Medical Assistance is very confusing and complex.  Even though most social workers and health and human service employees are very helpful and knowledgeable, they will not be able to help you in transferring and retaining the correct assets in order to qualify for aid.  In addition, if you do something wrong, and you forget to mention it, the penalties for lying can be serious.

Medicaid planning is an ever-changing area of law, and new rules are created all the time.  The best advice I can give you is that if you are thinking about Medicaid planning: call someone who knows what they are doing!  Trying to navigate this by yourself, even if you are fairly sophisticated, can cause serious problems and leave you or a loved one in a financial and emotional lurch.

In closing, it is important to plan ahead, both through estate planning and when navigating through the application process.  It is not worth it to save money on attorney fees, only to make matters worse, especially when an average month in a nursing home is currently nearly $8,000.00 per month.

The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.

Estate Planning – The Fundamentals

Evan Lin recently partnered with Associated Bank as a presenter for the North Central States Regional Council of Carpenters Benefits Conference held at the Paper Valley Hotel in Appleton on October 29, 2016. Attorney Lin’s presentation was titled “Estate Planning – The Fundamentals.”

Evan Lin Named Super Lawyer 2016

Evan Y. Lin, an attorney and managing member of Lin.Liebmann LLC, has been named to the 2016 Wisconsin Super Lawyers list by the publishers of Super Lawyers® Magazine.  Each year, only 5% of attorneys in Wisconsin are named a Super Lawyer.  Evan was previously named a 2015 Wisconsin Super Lawyer and five-time Wisconsin Rising Star in Estate Planning and Probate by the same publication.

Super Lawyers is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement.  The selection process includes independent research, peer nominations and peer evaluations.

Misclassification of Employees as Independent Contractors

Misclassification of Employees as Independent Contractors
By Attorney Nicholas J. Vlies of Lin.Liebmann LLC

On July 15, 2015, David Weil, the Wage and Hour Division Administrator, issued Administrator’s Interpretation (“AI”) No. 2015-1, which clarified the Department of Labor’s position on independent contractors. While the AI is not binding, the AI should be considered by companies that use independent contractors.

As noted in the AI, the FLSA defines an “employee” as “any individual employed by an employer” and the definition of “employ” includes “to suffer or permit to work.” 29 U.S.C. 203(d), (g). The AI argues that the “suffer or permit” definition was “specifically designed to ensure as broad of a scope of statutory coverage as possible.” Given the broad scope of the FLSA, the AI makes clear that “most workers are employees under the FLSA . . . .” To that end, the AI suggests that the economic realities test should be applied broadly in evaluating whether a worker is an employee or an independent contractor. Specifically, when applying the economic realities test “each factor should be considered in light of the ultimate determination of whether the worker is really in business for him or herself . . . or is economically dependent on the employer . . . .” The AI emphasizes that the factors should not be applied mechanically and that no single factor is determinative, including the traditional “control” factor. The Wage and Hour Division’s interpretation on how to apply the economic realities test will, more times than not, result in a determination that a worker is an employee.

Given the above, employers should evaluate whether any workers should be classified as employees rather than independent contractors. Moreover, employers should be cognizant of the risks associated with misclassifying workers as independent contractors.

If you have any questions regarding AI No. 2015-1 feel free to call us at 920-393-1190.

Employers Can Condition Continued Employment of Employee on Employee Signing Non-compete

On April 30, 2015, the Wisconsin Supreme Court decided Runzheimer International, LTD. V. Friedlen, 2015 WI 45, 362 Wis.2d 100, 862 N.W. 2d 879 and held that an employer may condition the continued employment of an employee on the employee signing a restrictive agreement, such as a non-compete.  The decision helps to clarify what constitutes adequate consideration for an employee entering into a restrictive covenant with their employer.  However, the Court did not address whether the agreement was reasonable.

In Runzheimer the employee, Friedlen, was required to sign an agreement which included confidentiality and non-compete provisions (the “Agreement”).  Friedlen had been an employee of Runzheimer for more than 15 years before he was asked to sign the Agreement.  Friedlen was given two weeks to review the Agreement.  If he did not sign the Agreement, then he would be fired.

Friedlen signed the Agreement and remained employed by Runzheimer until his termination, 29 months later.  Following his termination, Friedlen sought employment with a competitor of Runzheimer.  Friedlen was offered a position with the competitor and accepted the position after his attorney concluded that the Agreement was unenforceable.  Runzheimer filed suit against Friedlen for breaching the Agreement and Friedlen moved to dismiss Runzheimer’s claims.

The issue on appeal was whether the promise of continued employment, with no definite continuation period, of an existing at-will employee constituted valid consideration for a restrictive agreement.  In other words, under such circumstances, is an employee actually receiving a benefit in exchange for signing the restrictive agreement?

The Court unambiguously held that a promise of continued employment to a current at-will employee was sufficient to constitute valid consideration for entering into a restrictive agreement.  The Court concluded that Runzheimer’s promise not to terminate Friedlen upon the expiration of the two week review period, so long as the Agreement was signed by Friedlen, was valid consideration.  In fact, Runzheimer performed under the Agreement “immediately when it forbore its legal right to fire Friedlen at that time.”  Forbearance in exercising a right, in this case the right to terminate without cause, constitutes valid consideration.

While the decision clarifies the consideration issue under such circumstances, employers should still exercise caution under such arrangements.  This is especially true if an employee is terminated shortly after signing a restrictive agreement or there exists evidence of the employer’s intent to terminate the employee regardless of whether the employee signs the restrictive agreement.

It is also important to emphasize that the Court did not address the reasonableness of the Agreement.  Even when the elements of contract formation are met, a restrictive agreement can still be found unenforceable if it is determined that the restrictions do not pass Wisconsin’s reasonableness test.