Chapter 49

49.453 Annotation Although this section has specific requirements with which an annuity must comply, the initial question is whether the transfer of assets to the annuity is made for less than fair market value under sub. (2) (a). Buettner v. DHFS, 2003 WI App 90, 264 Wis. 2d 700, 663 N.W.2d 282, 01-0981.

49.453 Annotation An administrative determination that a nursing home resident’s purchase of a life estate in 66 percent of her son’s residence was a sham transaction of no value by which the purchaser divested herself of an annuity balloon payment was reasonable when she had entered a nursing home as permanent to the home, had lived there for five years with no realistic expectation of release, could not use the life estate at the time of purchase, and had no reasonable future expectation of being able to do so, and if the son sold the property, the life estate would be extinguished. Estate of Hagenstein v. DHFS, 2006 WI App 90, 292 Wis. 2d 697, 715 N.W.2d 645, 05-1303.

49.454 49.454 Treatment of trust amounts.

49.454(1) (1) Applicability.

49.454(1)(a) (a) Except as provided in sub. (4), this section applies to an individual with respect to a trust if assets of the individual or the individual’s spouse were used to form all or part of the corpus of the trust and if any of the following persons established the trust other than by will:

49.454(1)(a)1. 1. The individual.

49.454(1)(a)2. 2. The individual’s spouse.

49.454(1)(a)3. 3. A person, including a court or administrative body with legal authority to act in place of or on behalf of the individual or the individual’s spouse.

49.454(1)(a)4. 4. A person, including a court or administrative body, acting at the direction or upon the request of the individual or the individual’s spouse.

49.454(1)(b) (b) If the corpus of a trust under par. (a) includes assets of a person other than the individual or the individual’s spouse, this section applies only with respect to the portion of the trust attributable to the assets of the individual or the individual’s spouse.

49.454(2) (2) Treatment of revocable trust amounts. For purposes of determining an individual’s eligibility for, or amount of benefits under, medical assistance:

49.454(2)(a) (a) The corpus of a revocable trust is considered a resource available to the individual.

49.454(2)(b) (b) Payments from a revocable trust to or for the benefit of the individual are considered income of the individual.

49.454(2)(c) (c) Other payments from a revocable trust are considered transfers of assets by the individual subject to s. 49.453.

49.454(3) (3) Treatment of irrevocable trust amounts. For purposes of determining an individual’s eligibility for, or amount of benefits under, medical assistance:

49.454(3)(a) (a) If there are circumstances under which payment from an irrevocable trust could be made to or for the benefit of the individual, the portion of the corpus from which, or the income on the corpus from which, payment to or for the benefit of the individual could be made is considered a resource available to the individual, and payments from that portion of the corpus or income:

49.454(3)(a)1. 1. To or for the benefit of the individual, are considered income of the individual.

49.454(3)(a)2. 2. For any other purpose, are considered transfers of assets by the individual subject to s. 49.453.

49.454(3)(b) (b) Any portion of an irrevocable trust from which, or any income on the corpus from which, no payment could under any circumstances be made to or for the benefit of the individual, is considered to be an asset transferred by the individual subject to s. 49.453. The asset is considered to be transferred as of the date of the establishment of the trust, or, if later, the date on which payment to the individual was foreclosed. The value of the trust shall be determined for purposes of s. 49.453 by including the amount of any payments made from that portion of the trust after that date.

49.454(4) (4) Inapplicability. This section does not apply to any trust described in 42 USC 1396p (d) (4) or if the department determines, pursuant to procedures established by the department by rule, that the application of this section would work an undue hardship on an individual.

49.454 History History: 1993 a. 437.

49.454 Annotation Transfer of a disabled ward’s property to a newly-established “Medicaid Payback Trust” was in the ward’s best interest and authorized by sub. (4) and s. 880.19 (5) (b) [now s. 54.22]. Marjorie A.G. v. Dodge County Department of Human Services, 2003 WI App 52, 261 Wis. 2d 679, 659 N.W.2d 438, 02-1121.

49.454 Annotation Regardless of whether the asset held in an irrevocable trust is transferred as an annuity, it is nevertheless held in an irrevocable trust governed by this section, which specifically governs the treatment of trust amounts for purposes of medical assistance eligibility. Estate of Gonwa v. DHFS, 2003 WI App 152, 265 Wis. 2d 913, 668 N.W.2d 122, 02-2901.

49.454 Annotation Sub. (1) (a) requires that the assets of the individual were used to form all or part of the corpus of the trust. Sub. (1) (a) 4. plainly brings within this section trusts that are not established directly by an applicant or person legally authorized to act on behalf of the applicant but are indirectly established by the applicant in that the applicant directs or requests another person to establish the trust using the individual’s assets. Hedlund v. Department of Health Services, 2011 WI App 153, 337 Wis. 2d 634, 807 N.W.2d 672, 10-3070.

49.454 Annotation The documentary evidence in this case showed that a husband and wife transferred all of their property except for one checking account to their children, and, on the same day in the same document, the children transferred that property to the trust. The inference that the assets were transferred to the children for the purpose of establishing the trust for the parents’ benefit was a reasonable inference from the evidence and satisfied the requirement in sub. (1) (a) 4. that the children created the trust at the direction or upon the request of the parents. Even if other benefits resulted from the trust, it did not follow that the trust was not established at the parent’s direction or request. Hedlund v. Department of Health Services, 2011 WI App 153, 337 Wis. 2d 634, 807 N.W.2d 672, 10-3070.

49.455 49.455 Protection of income and resources of couple for maintenance of community spouse.

49.455(1) (1) Definitions. In this section:

49.455(1)(a) (a) “Community spouse” means an individual who is married to an institutionalized spouse.

49.455(1)(b) (b) “Consumer price index” means the consumer price index for all urban consumers, U.S. city average, as determined by the U.S. department of labor.

49.455(1)(c) (c) “Family member” means a minor or dependent child, dependent parent or dependent sibling of an institutionalized or community spouse who resides with the community spouse.

49.455(1)(d) (d) “Institutionalized spouse” means either an individual who is in a medical institution or nursing facility and is married to an individual who is not in a medical institution or nursing facility or an individual who receives services under a waiver under 42 USC 1396n (c) or (d) and is married to an individual who is not in a medical institution or nursing facility and does not receive services under a waiver under 42 USC 1396n (c) or (d).

49.455(1)(e) (e) “Resources” does not include items excluded under 42 USC 1382b (a) or (d) or items that would be excluded under 42 USC 1382b (a) (2) (A) but for the limitation on total value established under that provision.

49.455(2) (2) Applicability. The department shall use the provisions of this section in determining the eligibility for medical assistance under s. 49.46 or 49.47 and the required contribution toward care of an institutionalized spouse.

49.455(3) (3) Attribution of income.

49.455(3)(a) (a) Except as provided in par. (b), no income of a spouse is considered to be available to the other spouse during any month in which that other spouse is an institutionalized spouse.

49.455(3)(b) (b) Notwithstanding ch. 766, for the purposes of sub. (4), the following criteria apply in determining the income of an institutionalized spouse or a community spouse:

49.455(3)(b)1. 1. Except as determined under subd. 2. or 3., unless the instrument providing the income specifically provides otherwise:

49.455(3)(b)1.a. a. Income paid solely in the name of one spouse is considered to be available only to that spouse.

49.455(3)(b)1.b. b. Income paid in the names of both spouses is considered to be available one-half to each spouse.

49.455(3)(b)1.c. c. Income paid in the name of either or both spouses and to one or more other persons is considered to be available to each spouse in proportion to the spouse’s interest or, if payment is made to both spouses and each spouse’s individual interest is not specified, one-half of the joint interest is considered to be available to each spouse.

49.455(3)(b)2. 2. Except as provided in subd. 3., if there is no trust or other instrument establishing ownership, income received by a couple is considered to be available one-half to each spouse.

49.455(3)(b)3. 3. Subdivisions 1. and 2. do not apply to income other than income from a trust if the institutionalized spouse establishes, by a preponderance of the evidence, that the ownership interests in the income are other than as provided in subds. 1. and 2.

49.455(4) (4) Protecting income for community spouse.

49.455(4)(a) (a) After an institutionalized spouse is determined to be eligible for medical assistance, in determining the amount of that institutionalized spouse’s income that must be applied monthly to payment for the costs of care in the institution, the department shall deduct the following amounts in the following order from the institutionalized spouse’s income:

49.455(4)(a)1. 1. The personal needs allowance under s. 49.45 (7) (a).

49.455(4)(a)2. 2. The community spouse monthly income allowance calculated under par. (b) or the amount of income of the institutionalized spouse that is actually made available to, or for the benefit of, the community spouse, whichever is less.

49.455(4)(a)3. 3. A family allowance for each family member equal to one-third of the amount by which the family member’s monthly income is exceeded by the following:

49.455(4)(a)3.a. a. Beginning on September 30, 1989, and ending on June 30, 1991, 122 percent of one-twelfth of the poverty line for a family of 2 persons.

49.455(4)(a)3.b. b. Beginning on July 1, 1991, and ending on June 30, 1992, 133 percent of one-twelfth of the poverty line for a family of 2 persons.

49.455(4)(a)3.c. c. Beginning on July 1, 1992, 150 percent of one-twelfth of the poverty line for a family of 2 persons.

49.455(4)(a)4. 4. The amount incurred as expenses for medical or remedial care for the institutionalized spouse.

49.455(4)(b) (b) The community spouse monthly income allowance equals the greater of the following:

49.455(4)(b)1. 1. The minimum monthly maintenance needs allowance determined under par. (c) or the amount determined at a fair hearing under sub. (8) (c), if such an amount has been determined, minus the amount of monthly income otherwise available to the community spouse.

49.455(4)(b)2. 2. The amount of monthly support which a court orders the institutionalized spouse to pay for the support of the community spouse.

49.455(4)(c) (c)

49.455(4)(c)1. 1. For any year, the minimum monthly maintenance needs allowance equals the lesser of the amount determined under subd. 2., or the sum of the following:

49.455(4)(c)1.a. a. One-twelfth of 200 percent of the poverty line for a family of 2 persons.

49.455(4)(c)1.b. b. Any excess shelter allowance under par. (d).

49.455(4)(c)2. 2. The minimum monthly maintenance needs allowance in a year may not exceed $1,500 increased by the same percentage as the percentage increase in the consumer price index between September 1988 and September of the year before the year involved.

49.455(4)(c)3. 3. In making the calculation under subd. 1. a., when the poverty line is revised the department shall use the revised amount starting on the first day of the 2nd calendar quarter beginning after the date of publication of the revision.

49.455(4)(d) (d) The excess shelter allowance equals the amount by which 30 percent of the amount determined under par. (c) 1. a. is exceeded by the sum of the following:

49.455(4)(d)1. 1. The community spouse’s expenses for rent or mortgage principal and interest, taxes and insurance for his or her principal residence and, if the community spouse lives in a condominium, a cooperative, or an unincorporated cooperative association, any required maintenance charge.

49.455(4)(d)2. 2. The standard utility allowance established under 7 USC 2014 (e), except that if the community spouse lives in a condominium, a cooperative, or an unincorporated cooperative association for which the maintenance charge includes utility expenses, the standard utility allowance under 7 USC 2014 (e) is reduced by the amount of the utility expenses included in the maintenance charge.

49.455(5) (5) Rules for treatment of resources; ineligibility.

49.455(5)(a) (a)

49.455(5)(a)1. 1. The department shall determine the total value of the ownership interest of the institutionalized spouse plus the ownership interest of the community spouse in resources as of the beginning of the first continuous period of institutionalization beginning after September 29, 1989. The spousal share of resources equals one-half of that total value.

49.455(5)(a)2. 2. At the beginning of the first continuous period of institutionalization beginning after September 29, 1989, upon the request of an institutionalized spouse or a community spouse and the receipt of necessary documentation, the department shall assess and document the total value of resources under subd. 1. and shall provide a copy of the assessment and documentation to each spouse and retain a copy for departmental use. If the request is not part of an application for medical assistance, the department may charge a fee not exceeding the reasonable expenses of providing and documenting the assessment. When the department provides a copy of an assessment, it shall provide notice that a spouse has the right to a fair hearing under sub. (8) after an application for medical assistance is filed.

49.455(5)(b) (b) Notwithstanding ch. 766, in determining the resources of an institutionalized spouse at the time of application for medical assistance, the amount of resources considered to be available to the institutionalized spouse equals the value of all of the resources held by either or both spouses minus the greatest of the amounts determined under sub. (6) (b) 1. to 4.

49.455(5)(c) (c) The amount of resources determined under par. (b) to be available for the cost of care does not cause an institutionalized spouse to be ineligible for medical assistance, if any of the following applies:

49.455(5)(c)1. 1. The institutionalized spouse has assigned to the state any rights to support from the community spouse.

49.455(5)(c)2. 2. The institutionalized spouse lacks the ability to execute an assignment under subd. 1. due to a physical or mental impairment but the state has the right to bring a support proceeding against the community spouse without an assignment.

49.455(5)(c)3. 3. The department determines that denial of eligibility would work an undue hardship.

49.455(5)(d) (d) During a continuous period of institutionalization, after an institutionalized spouse is determined to be eligible for medical assistance, no resources of the community spouse are considered to be available to the institutionalized spouse, except that a transfer of those resources or other assets by the community spouse within the first 5 years of eligibility of the institutionalized spouse may result in a period of ineligibility under s. 49.453 (2) and (3) for the institutionalized spouse.

49.455(5)(e) (e) The department may deny to the institutionalized spouse eligibility for Medical Assistance if, when requested by the department, the institutionalized spouse and the community spouse do not provide the total value of their assets and information on income and resources to the extent required under federal Medicaid law or sign the application for Medical Assistance.

49.455(6) (6) Permitting transfer of resources to community spouse.

49.455(6)(a) (a) Notwithstanding s. 49.453 (2), an institutionalized spouse may transfer an amount of resources equal to the community spouse resource allowance determined under par. (b) to, or for the sole benefit of, the community spouse without becoming ineligible for medical assistance for the period of ineligibility under s. 49.453 (3) as a result of the transfer. The institutionalized spouse shall make the transfer as soon as practicable after the initial determination of eligibility for medical assistance, taking into account the amount of time that is necessary to obtain a court order under par. (c).

49.455(6)(b) (b) The community spouse resource allowance equals the amount by which the amount of resources otherwise available to the community spouse is exceeded by the greatest of the following:

49.455(6)(b)1. 1. In any year, $12,000 increased by the same percentage as the percentage increase in the consumer price index between September 1988 and September of the year before the calendar year involved.

49.455(6)(b)1m. 1m. $50,000.

49.455(6)(b)2. 2. The lesser of the following:

49.455(6)(b)2.a. a. The spousal share computed under sub. (5) (a) 1.

49.455(6)(b)2.b. b. In any year, $60,000 increased by the same percentage as the percentage increase in the consumer price index between September 1988 and September of the year before the year involved.

49.455(6)(b)3. 3. The amount established in a fair hearing under sub. (8) (d).

49.455(6)(b)4. 4. The amount transferred under a court order under par. (c).

49.455(6)(c) (c) If a court has entered a support order against a community spouse, s. 49.453 does not apply to resources transferred under the order for the support of the community spouse or a family member.

49.455(7) (7) Notice. The department shall notify both spouses upon a determination of medical assistance eligibility of an institutionalized spouse, or shall notify the spouse making the request upon a request by either an institutionalized spouse or a community spouse, of all of the following:

49.455(7)(a) (a) The amount of the community spouse monthly income allowance calculated under sub. (4) (b).

49.455(7)(b) (b) The amount of any family allowances under sub. (4) (a) 3.

49.455(7)(c) (c) The method for computing the amount of the community spouse resource allowance under sub. (6) (b).