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Rotunda Report
  • Rotunda Report
    June 05, 2013

    Changes to Divestment, Estate Recovery Approved By Joint Finance, Head to Legislature

      Call to action: The Elder Law and Family Law Sections of the State Bar of Wisconsin are encouraging members to voice their concerns over proposed changes to Medical Assistance, which will have real and practical effects on clients as they make arrangements for their future.

      To join the Elder Law and Family Law Sections in their opposition to the proposed MA budget when it comes to marital property, trusts, real estate transfers, estate recovery, divestments and spousal impoverishment, you can call and/or email your legislator prior to final action on the budget in the Wisconsin Assembly and Senate.

      To find your legislator, click here.

    June 5, 2013 – The Joint Finance Committee approved several provisions of the governor’s proposed changes to Medical Assistance (MA) in an omnibus motion during yesterday’s final finance committee meeting. The committee voted to approve the changes in a party line vote of 12-4.

    The State Bar of Wisconsin’s Family Law Section and Elder Law Section spent the last few weeks sharing their concerns with the Department of Health Services (DHS) and the members of the Joint Finance Committee over the governor’s proposed changes to MA. The groups contend that the proposal will have a negative impact on marital property, trusts, real estate transfers, estate recovery, divestments and spousal impoverishment.

    According to practitioners, the changes will have real and practical effects for clients. Going forward, clients  looking to plan for their future care will have to carefully weigh their options, especially when it comes transferring a family farm or business or protecting a healthy spouse from financial uncertainty.

    Katie StenzKatie Stenz is the public affairs coordinator with the State Bar of Wisconsin. She can be reached at, or by phone at (608) 250-6145.

    The Family Law section takes issue with an element of the proposal that they say promotes divorce among long-married couples: A clause states that DHS can claim 100 percent of a surviving spouse’s property. The proposal also prevents children from borrowing against a property they received from their parents.

    In a memo to members of the Joint Finance Committee and DHS, the Elder Law Section argued that several of the changes violate federal law and directly conflict with existing state laws. The group said that they do not believe that as a whole, the changes will have a “marked fiscal impact when compared to the public policy and unintended consequence costs if they remain in place.”

    DHS claimed that the proposed changes are “permitted by federal law and important to protect taxpayer funds.”

    The department ultimately conceded to one of the section’s claims about an error with counting the value of life insurance. The section contended that the face value of insurance – not its cash value – determines if the insurance can be counted as an asset.

    Both the Family and Elder Law Sections recommended over ten changes to the proposal. 

    Editor’s Note:  The State Bar of Wisconsin establishes and maintains sections for carrying on the work of the association, each within its proper field of study defined in its bylaws.  Each section consists of members who voluntarily enroll in the section because of a special interest in the particular field of law to which the section is dedicated.  Section positions are taken on behalf of the section only.

    The views expressed on this issue have not been approved by the Board of Governors of the State Bar of Wisconsin and are not the views of the State Bar as a whole. These views are those of the Sections alone.

    If you would have questions or would like more information please contact Sandy Lonergan at or 608-250-6045.


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