Want A Life Estate? Do it NOW

There has been a lot of discussion amongst ourselves here at Lubinski, Reed & Klass, S.C. and among other elder law attorneys, around the State as to how best advice our clients interested in planning for nursing home assistance in light of the changes to estate recovery in Wisconsin. How these new rules affect one of the more popular planning tools in medical assistance, life estates, has been a major topic.

The State of Wisconsin Department of Health Services has released a memo indicating that, amongst other things, life estates created ON OR AFTER August 1, 2014 would be subject to Estate Recovery.  Generally, this means that the State will value the life estate as of the date of death of the life estate holder and be reimbursed for the medical expenses it paid of behalf of that person and/or that person’s spouse up to the value of the life estate.  As the memo is written, this rule will not apply to life estates created before August 1, 2014.

There is a small window of opportunity for people that wish to make a gift of their home and retain the right to live there by using a life estate, without this new recovery rule applying.  There are still many unanswered questions regarding these estate recovery rules.  A life estate is not a good plan for everyone.  If you are interested in looking into this further, contact an experienced elder law attorney as soon as possible.

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.

Pursuant to the rules of professional conduct set forth in Circular 230, as promulgated by the United States Department of the Treasury, nothing contained in this communication was intended or written to be used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer by the Internal Revenue Service, and it cannot be used by any taxpayer for such purpose.  No one, without our express prior written permission, may use or refer to any tax advice in this communication in promoting, marketing, or recommending a partnership or other entity, investment plan or arrangement to any other party.