New Wis. Stat. s. 49.849(3)(a), provides that any property of a decedent that is transferred by a person who has possession of the property at the time of the decedent’s death is subject to the right of the DHS to recover the value of the decedent’s interest in the property. The interest in property or value equal to the same is to be transmitted to the DHS. Property of a decedent is defined as:
“all real and personal property to which the recipient had any legal interest in immediately before death, to the extent of that title or interest, including assets transferred to a survivor, heir, or assignee through joint tenancy, tenancy in common, survivorship, life estate, living trust or any other arrangement.”
There is a presumption that all property of a deceased surviving spouse was marital, and therefore, the deceased surviving spouse’s property is also subject to these requirements. The amount that the DHS can recover is based on the fair market value of the decedent’s fractional interest in the property. The burden of proof for establishing value is on the surviving owners or beneficiaries, or their representatives. Fair market value must be established through a credible methodology, which may include appraisal. For life estates, the fractional value will be based on the life estate-remainderman tables used by the DHS to value life estates. The value will be determined as of the Medicaid recipient’s date of death, as though he or she is still alive.
Although the new law provides no method for the timing of the notice, or for assuring that the alleged surviving joint tenant, remainderman or beneficiaries actually receive the notice from the DHS, failure to comply can result in a request for a court order and judgment against the tenant, remainderman or beneficiary without notice. A person who is in possession of property subject to the new law and who has received a notice from the DHS can request a fair hearing within 45 days of the notice. The right to a fair hearing, however, is limited to a determination on the value of the property and the percentage of ownership of the Medicaid recipient in the asset.
The new law applies to all of the enumerated property interests currently in existence, not just to those created after October 1, 2013. The applicable time frame will be for deaths occurring after the effective date of the new law.