A Family Legacy Since 1920

• Family and Locally Owned

• Compassionate Legal Experts

• Family and Locally Owned

• Compassionate Legal Experts

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Prepare and Preserve Your Future

The old way of handling divestment for purposes of estate planning was to simply give away assets for less than their fair market value. Because of recent changes in federal law this is no longer considered a viable tool for medical assistance planning or asset protection. Now, it is strongly recommended that if your assets are below $250,000, primarily consisting of your home, do NOT give any of your assets away to anyone without first talking to an attorney about the possible negative consequences of this strategy.

Avoid this mistake — contact Schmidt & Schmidt S.C. today and learn about what you can do.

Medical and Nursing Home Planning

The high cost of medical care and nursing home care can wipe out everything that a person has worked hard for, saved or acquired over the course of a lifetime. With the average cost of a nursing home being over $6,100 per month, an individual’s or a couple’s savings could be consumed in a manner of a year.

Because of the severe negative consequences of doing the wrong action, significant advance planning is necessary to avoid a situation where you or your loved ones have to sell your assets just to pay for your medical or nursing home care. This goal can be accomplished with the help of an experienced elder law lawyer.

All you need to do is call.

At Schmidt & Schmidt S.C., we help people in Wausau, Marathon County, and throughout North Central Wisconsin to protect the assets of their estate from the high costs of health care and nursing home needs. We do this through careful medical and nursing home planning and through the use of effective asset protection strategies. However, the important thing to remember is that there is no better time than right now to take this critical step.

Medical Assistance Planning FAQ

NOTE OF WARNING:
In early February 2006, Congress made [eliminated] major changes to the “Divestment Planning” tools that have been used by attorneys and financial advisors for many years. [Deficit Reduction Act of 2005.]

As of this writing “Divestment” – the giving away of assets for less than fair market value – is no longer considered a viable tool for planning. We strongly recommend that if your assets are below $250,000.00, primarily consisting of your home, do NOT give any of your assets away to anyone without first talking to an attorney about the many negative outcomes that will befall you.

Doing the Right Thing for Aging Loved Ones
Most people who visit this page are the children of those likely to go into a nursing home in the near future. Dealing with our parents is at times more challenging than dealing with raising our children.

We love our parents and they love us. But the stresses of making these decisions are so often seen as the last resort, the final step, or the first nail of the coffin. Emotions run high. So high that no one wants to talk about the nursing home, financial assistance, medical assistance, Medicaid, assisted living options, COP programs, property divestment, burial instructions, funeral trusts or any other elderly-related subject.

A Brief Story
Several years ago, Andrew was sitting at the dining room table with his inlaws and his wife’s siblings. During a discussion on end-of-life planning, one of the siblings asked, “So Dad, where is your will kept?”

You would have thought Andrew had asked his father-in-law to jump over the moon! He would not tell nor would he reveal who drafted it. “Some things are just to be kept private,” he argued. “You’ll find out when I die!” Since then no one has asked a single related question.

This response is so very wrong! Yet it is uttered in about half of the families we assist. If your parents are asking you to take care of them at the end of their lives, when they can no longer take care of themselves or upon their death, their financial and legal affairs would be a lighter burden upon you knowing ahead of time where, what and how critical information is kept.

With a month in a skilled nursing facility costing about $6,700, or $80,400.00 per year, few Wisconsinites have the cash or resources to pay this kind of monthly expense. If your parents have a home, a couple of cars, life insurance, some CDs, annuities, a vacation cabin, and an IRA you will face the obligation of selling ALL of them to pay for skilled nursing care.

We invite you to speak with one of our attorneys. Schmidt & Schmidt S.C., will create a Medical Assistance Plan that is age, marriage and income appropriate taking into account the huge number of variables each family has. Below are answers to questions:
  • What Is Medical Assistance Planning?

    Medical assistance [MA] covers a wide range of medical services for the income eligible. These medical services are provided by MA-certified providers and facilities. MA long-term care pays for the skilled nursing home care of an MA patient. But to have MA pay for the nursing home the MA patient must have no "assets." If a person has assets these assets must be spent down or divested before a person can become eligible for MA nursing home care.


    This is typically why most elderly seek out an attorney to assist them in qualifying for MA. In order to qualify for MA a person has to have no “assets” or be “broke”. But what “broke” means to MA is not what it means to the average person.


    At our Wausau law firm, medical assistance planning involves a detailed review of a client’s assets and income. These are then weighted against the requirements of MA. A Medical Assistance Plan is created for the client. With proper planning and prompt implementation of this plan a person can save thousands to tens of thousands of dollars.

  • How Do I Become Eligible for Medical Assistance?

    To be financially eligible for Long-Term Care Assistance a client will need to show he or she has few assets and little income available to pay for a nursing home.


    “Asset Eligibility” means $2,000 or less in cash and no other assets except exempt assets. Exempt assets include:


    • Primary residence
    • Vehicle
    • Personal possessions
    • Wedding and engagement rings
    • Term life insurance
    • Burial funds (depending on program $4,500 on up), or prepaid funeral/burial policy irrevocably paid to a funeral home
    • Tools of trade

    At Schmidt & Schmidt S.C., these eligibility rules are matched up against a variety of very effective tools that can allow you to retain possession of many of your assets. The degree of retention depends on many factors. The best is early planning.

  • Will the Nursing Home Take My House?

    No. The nursing home does not take your home. But if you use MA Long-Term Care Assistance, a lien (like a mortgage) will be placed on your home to reimburse the state for the money it spent on your care. After your death this lien will have to be paid. This means the house will then have to be sold to pay this bill.


    A Last Will and Testament cannot stop a lien from being placed against your house. A Durable Power of Attorney will not stop a lien. Nor will a revocable trust stop a lien. There is little one can do as they are moving in to a nursing home to prevent a lien from being placed on the house.


    Advanced planning is VERY CRITICAL. Do not hesitate. We have seen tears, heard some bad words and have felt powerless when family members ask us what they can do to prevent the “nursing home from taking the house” after mom or dad have been admitted.


    At Schmidt & Schmidt S.C., we know what you can do to keep your home in your family. With all of the variables present in each family a quality Medical Assistance Plan will be presented to you for your consideration.

  • Will My Spouse Have to “Go Broke” Too?

    The answers presented above focus on a single or unmarried individual. When one of a married couple needs MA Long-Term Care then a new set of rules is applied to the scenario. The person going into a nursing home is called an “Institutionalized Spouse” and the other person is called the "Community Spouse." The institutionalized spouse generally follows the guidelines set above. Meaning he/she will have to be “broke.”


    The Community Spouse does not have to be broke or "impoverished." But on the other hand the Community Spouse cannot be a millionaire in his or her own name. Typically the Community Spouse can retain the marital residence, a significant amount of cash assets, his/her IRAs, and sufficient assets to ensure a nice monthly income.


    Your Medical Assistance Plan created at Schmidt & Schmidt S.C., will clearly address the needs of a married couple with an eye toward keeping as many of the family assets in the family.

  • Can My Children Participate?

    With your written permission we would be very glad to discuss, inform and/or educate your children on what you are planning to do.


    It is foolish to exclude your children or your caregivers from this process. To do so could mean thousands of dollars not given to your family, and a great deal of anguish over missed opportunities.

Medical Assistance Planning for Long Term Care

Not all of us will be so lucky to never need the use of a nursing home. Some of us may need these services for a few weeks, others a few years. A “nursing home” is not an Assisted Living Center or a Community-Based Residential Facility. It is a facility with skilled nursing care.

It is this skilled nursing care that is so very expensive. A month in a nursing home here in central Wisconsin can cost upwards of $7,000 per month! A year of such care can cost over $80,000 for one person. For the average Wisconsinite such spending will consume all that the patient has saved. Further, what if there is still a surviving spouse healthy and well living at home? Living in sheer poverty should not be the end result of such families.

Please keep in mind that financial impoverishment is not necessary. With the assistance of the Wausau attorneys at Schmidt & Schmidt S.C., going broke does not have to happen to you, your parents, or other loved ones.

Many of our clients are children with elderly parents. We will work with the whole family in researching, developing and implementing various estate planning and medical assistance planning programs to help those who are likely to need the services of a nursing home.

Medical assistance planning is not illegal. It is as legal and necessary as income tax planning. The tools used in medical assistance planning are (1) spending and conversion of assets and (2) divestment and other gift planning.

Key Components of Medical Assistance Planning

Several asset types are not counted as “assets” for medical assistance. These are assets you can keep and need not be sold or given away to qualify for medical assistance. These include the home, some cash savings ($2,000 if single or up to $107,000 if married), prepaid funeral and burial, minute life insurance, personal property, and an automobile. Many of these assets are limited in quantity.

However, a "medical assistance" lien will be placed on your home if you are single or your spouse needs the services of a nursing home too.

The look-back period for property given away for no less than fair market value is 60 months or 60 months if you have transferred property to any type of trust.

When you give away property you create a period of ineligibility for medical assistance. This period of ineligibility (months) is the quotient of the value of the gift over the Average Cost on a Month in Nursing Home (recalculated yearly by state of Wisconsin). Example: Month in nursing home ($7,500) over value of gift ($19,000) or 49,000/7,500 = 6.5 months of ineligibility.

Ineligibility starts with the month of the gift and fractions of a whole month are eliminated. Thus, in the example above, the gift-giver will not be able to receive long-term care through medical assistance for six and a half months after the applicant has applied.

The Long-Term Care component of medical assistance is changing and Congress is reviewing many aspects of the program for budget purposes. This will make planning ever more necessary.

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(877) 757-6995

(877) 757-6995

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