June 26, 2013
As the date approaches for Governor Scott Walker to sign into law a new budget bill for Wisconsin, the trust and probate lawyers at Wokwicz Law Offices LLC will be keeping a close eye on developments. At Wokwicz Law Offices, we are particularly concerned about the possibility that Amendment 3 of the Wisconsin Budget Bill will be vetoed by Governor Walker. Such a veto would be bad for the people of Wisconsin.
Amendment 3: Protecting Wisconsin’s Residents
The proposed changes in the Wisconsin Budget Bill will bear a significant impact on trusts and trustees as it will require detailed reporting to the State of Wisconsin of assets and Notice to the State of Wisconsin at death. It will also cause real problems for Wisconsin residents who receive medical assistance and for their spouses and families limiting the ability to pass assets onto loved one’s if a spouse received Medical Assistance.
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The bill is likely to have a major impact on other estate planning considerations, such as life estates and marital property planning. This far-reaching bill, with extensive changes, is one that our legal team will continue to analyze even after it is signed into law. We will make an in-depth study as to its impact on estate planning, trusts, life estates, power of attorneys, Last Wills and Testaments, and marital property:
Changes to Medical Assistance in Wisconsin
The Wisconsin Legislature has adopted changes to the estate recovery and divestment law with respect to Medical Assistance (also referred to as Medicaid). This amendment to the budget bill, Assembly Amendment 3, would delay implementation of the new provisions and rules until a later date so that the Department of Health Services can develop a plan that must then be approved by the Joint Finance Committee.
At Wokwicz Law Offices LLC, we are hopeful that the Governor will not veto Amendment 3, as there are significant problems with the proposed changes to the law as written. The budget bill, as it stands, will result in much litigation and cause major issues with implementation. The budget proposal will bring changes to force married individuals to track marital property for decades (even upon remarriage) if a spouse has received Medical Assistance (Medicaid).
A Wider Issue
It is expected that there will be a wide range of fallout from some of the provisions within the new Wisconsin budget bill. It is very possible that the overbearing requirement to track marital property will encourage divorce and might even cause people to move out of the state.
In addition, the changes as written will impact trusts even where the Medicaid recipient has little or no interest in the trust, requiring detailed reporting by trustees. In addition, family businesses and family farms will be impacted., as protections afforded to business owners and farmers for profit producing businesses may no longer apply.
We are hopeful that with a delayed implementation, allowed under Amendment 3, that the more troubling aspects of the Budget Bill will be changed.
Below is the language from Amendment 3, that we are hopeful will withstand the Governor’s veto power, so that these changes can be thought out and implemented in an orderly fashion:
(6i) ESTATE RECOVERY AND DIVESTMENT PROVISION APPROVAL. By no later than June 30, 2015, the department of health services shall submit one or more proposals to the joint committee on finance requesting approval of the implementation of the estate recovery and divestment provisions of this act. Notwithstanding SECTIONS
9318 (3), (4), (5), (6), (7), and (8) and 9418 (2) of this act, the department of health services may not implement any of the following estate recovery or divestment provisions of this act without the approval of the joint committee on finance…