Will Parents’ Long-Term Care Costs Sink the Farm? [Wisconsin]

For those from a farming family, a farm is the family home as well as the family business. For medical-assistance benefits purposes, the value of the farm is not considered an asset. But when the parent that received the care passes away, the home’s value is part of that person estate and the state will file against it to recoup some of the costs of the care benefits. The inheriting person or people may then have to come up with cash or sell of other assets to make sure the farm is not sold off.

Gifting the farm to the next generation of farming children could be an option, but there are risks. When applying for medical assistance, the state will use a “look back” process of checking gifts of assets transferred within five years. If there have been a hefty gifting of property, certain benefits may be withheld. The parent also loses all control over the farm that they worked so hard for.

A more viable option may protect the farm from long-term care costs but also retain control would be to place the farm in an irrevocable trust and have the parents named as trustees. It would still be reviewed by the state under the “look back” policy, but it will be protected and the parents will retain control.

See Aric D. Burch, Will Parents’ Long-Term Care Costs Sink the Farm?, Ruder Ware, July 11, 2018.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.) for bringing this article to my attention.