A consequence of the new Medicaid changes here in Wisconsin may actually lead people to intentionally do probate. That is, not merely to have to do probate, but to want to do probate. The reason is fairly simple. If the State has a claim they can assert as part of Estate Recovery (to seek reimbursement for Medicaid, paid for nursing home, family care, IRIS, etc.) the new State Law includes a list of priorities, to determine who gets paid first, second, and the like. Not surprisingly, the State gets paid first.
On the other hand, if one were to do a probate, the probate code by itself has its own list of priority of claimants. There, the first level of priority is for costs and expenses of administration, including personal representative fees and attorney’s fees, as well as Court costs and related expenses. Second is funeral and burial expenses; third is provisions for the family; fourth is expenses of last illness; fifth would be debts, charges or taxes owed to the Federal Government or State Government; sixth would be wages owed to employees; seventh would be property assigned to a surviving spouse or domestic partner, and eighth, would be the claims of Estate Recovery, on the same par as all other claims or unpaid debts.
Thus, as you can see, not only is it better for the family, but it is also better for many creditors, if you use the probate order of priorities, rather than the Medicaid order of priorities. This will likely have the unintended consequence of people and families being better off going through probate, than not. Why does this make sense? It doesn’t. Once again, we see how the Medicaid rules, perhaps without intending, are an extra burden on most of us, because we will need to go through probate. On the other hand, wealthy people, who will likely never be on Medicaid, will have the distinct advantage of being able to use all of the probate avoidance techniques that will save them time and money. This is another example of the Medicaid laws treating Wisconsin families unfairly.