State of Wisconsin Department of Health Services

Release 25-02 April 9, 2025

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33.3 Estate Claims

DHSDepartment of Health Services recovers BadgerCare Plus benefit costs from the member’s estate or from the member’s surviving spouse’s estate.

Recovery from a member’s surviving spouse’s estate will be limited to 50% of the marital property that the member had an interest in immediately prior to death.

When DHS learns of the death of a member or a member’s surviving spouse, it files a claim in probate court in the amount of BadgerCare Plus recoverable benefits.

The probate court will not allow a claim on the estate to be paid if any of the following survives the member:

1. A spouse.
2. A child, if the child is:
   1. Under age 21, or
   2. Blind, or
   3. Disabled.

Do not negotiate a settlement, accept any funds, or sign any release for estate claims that have been filed by DHS. ERPEstate Recovery Program staff should be notified if a claim is filed by the county against an estate for recovery of overpayments or incorrect BadgerCare Plus benefits, for those 55 years of age or older.

Refer any questions about specific estate claims to the ERP staff.

33.3.1 Waiver of Estate Claim

An heir or beneficiary of the deceased member’s estate or co-owner or beneficiary of a member’s non-probate property may apply for a waiver of an estate claim filed by ERP. To be successful, the person applying for the waiver must show one of these three hardships exist:

1. The waiver applicant would become or remain eligible for AFDC, SSI, FoodShare or Medicaid if ERP pursued the estate claim.
2. The deceased member’s real property is part of the waiver applicant’s business (for example, a farm) and the ERP recovery claim would affect the property and result in the waiver applicant’s loss of their means of livelihood.
3. The waiver applicant is receiving general relief or veteran’s benefits based on need under §45.40(1m) Wis. Stats.

The waiver application must be made in writing within 45 days after the day:

1. ERP mailed its recovery claim to the probate court or its affidavit to the heir, beneficiary, or co-owner or
2. ERP mailed its notice of waiver rights, whichever is latest.

The waiver application must include these points:

1. Relationship of the waiver applicant to the deceased member.
2. The hardship under which the waiver is requested.

ERP staff must issue a written decision granting or denying the waiver request within 90 days after the waiver application is received by ERP. In determining its decision, ERP must consider all information provided to it within 60 days of its receipt of the waiver application.

33.3.2 Notice of Hardship Waiver Rights

ERP will provide notice of the waiver provisions to the person handling the deceased member's estate. If ERP is not able to determine who that person is, the notice will be included with the claim when ERP files it with the claim court.

The person handling the estate is then responsible for notifying the decedent’s heirs and beneficiaries of the waiver provisions.

ERP will provide notice of the waiver provisions to co-owners and beneficiaries of the member’s non-probate property.

33.3.3 Administrative Hearings: Hardship Waivers

If a waiver application is denied, the waiver applicant may request an administrative hearing. ERP staff will attend the hearing to defend their denial of the hardship waiver.

The hearing request must be made within 45 days of the date the ERP decision was mailed.

The hearing request must:

1. Be made in writing.
2. Identify the basis for contesting the ERP decision.
3. Be made to the Division of Hearings and Appeals (DHA) at:

Department of Administration

Division of Hearings and Appeals

P.O. Box 7875

Madison, WI 53707-7875

The date the request is received at DHA is used to determine the timeliness of the request.

ERP staff will maintain DHS’ claim in the estate pending the administrative hearing decision. If collections are made and the waiver is ultimately approved, those funds will be returned.

To introduce evidence at a hearing not previously provided to DHS, the applicant must mail that evidence to DHS with a postmark at least seven working days before the hearing date.

33.3.4 Personal Representative’s Notice

The personal representative of the estate of a BadgerCare Plus member or the estate of a member's surviving spouse must notify DHS that the estate is being probated [§859.07(2), Wis. Stats.]. The notification must be by certified mail and include the date by which claims against the estate must be filed.

33.3.5 Real Property as Part of the Estate

When real property is part of the estate, ERP may file a lien equal to the BadgerCare Plus payments even if one of these persons is alive:

1. The spouse.
2. A child under age 21.
3. A disabled or blind child of any age.

Recovery through the lien will not be enforced as long as any of these persons meet the criteria and is alive.

Example 1

Mr. A dies. A claim on his estate is filed and the estate includes real property. His spouse is deceased, and he has no blind or disabled child. He has a child, age 19. This child lives outside Mr. A’s home. A lien is placed on the real property but cannot be enforced because the minor child is still alive. The child later turns 21. As there is then no living spouse, child under 21, or disabled or blind child, the lien can be enforced.

DHS will take a lien in full or partial settlement of an estate claim against the portion of an estate that is a home if:

1. A child, of any age of the deceased member:
   1. Resides in the member’s home, and
   2. That child resided in that home for at least 24 months before the member entered the nursing home, hospital, or received home and community-based waiver services, and
   3. That child provided care that delayed the member’s move to the nursing home, hospital, or their receipt of home and community-based waiver services.
2. A sibling of the deceased member:
   1. Resides in the member’s home, and
   2. Resided in that home for at least 12 months before the date the member entered a nursing home, hospital, or received home and community-based services.

The lien filed in one of these two instances will be payable at the death of the caretaker child or sibling or when the property is transferred, whichever comes first.

However, if the caretaker child or sibling sells the home covered by the DHS lien, and uses the sale proceeds to buy another home to be used as that child’s or sibling’s primary residence, then:

1. DHS will transfer the lien to the new home if the amount of the caretaker child or sibling’s payment or down payment for the new home is equal to or greater than the proceeds from the original home.
2. If the down payment on the new home is less than the proceeds from the sale of the original home, DHS will recover the amount of the proceeds above the down payment, but no greater than the lien amount. If there is an amount in the lien still not satisfied, DHS will file a lien for the remaining amount on the new home.

33.3.6 Affidavits in Small Sum Estates and Non-Probate Property

Heirs, guardians, and trustees of revocable trusts created by a deceased BadgerCare Plus member must notify ERP before transferring any of the deceased’s property through a Transfer by Affidavit ($50,000 and under) (§867.03, Wis. Stats.). The heir, guardian or trustee must send a copy of the affidavit to ERP by certified mail, return receipt requested. Examples of property include bank accounts (savings or checking); postal savings; credit union or building and loan shares; contents of safe deposit boxes; savings bonds; stocks and other securities; promissory notes and mortgages which are payable to the member and negotiable; real estate; etc.

If an heir, guardian or trustee transfers the deceased’s property, ERP will send an affidavit to the heir, guardian, or trustee to recover any funds remaining after burial and estate administration costs have been paid. Funeral costs are limited to those expenses connected with the funeral service and burial. A marker for the grave is considered a burial cost. Memorials and/or donations to churches, organizations, persons, or institutions are not considered burial costs.

ERP will also send its affidavit to the co-owners and/or beneficiaries of a member’s non-probate property. Non-probate property is property that passes outside an individual’s estate. This means that non-probate property does not go through probate before it is transferred to those who inherit it. Non-probate property subject to recovery includes, but is not limited to, life estates, property held in joint tenancy, life insurance proceeds, property held in revocable trusts, and property that is payable-on-death or transfer-on-death to a beneficiary.

Co-owners and beneficiaries of a member’s non-probate property have the right to request a fair hearing as on the value of the member’s interest in the property.

The value of the member’s interest for jointly owned property is the percentage interest attributed to the member when Medicaid eligibility was determined or, if not determined at eligibility, the fractional interest the member had in the property at their death. For life estate interests, the value is the percentage of ownership based on the member’s age at the date of death, according to the life estate tables used for Medicaid eligibility.

The value of the property is the fair market value. Fair market value is the price a willing buyer would pay to a willing seller for purchase of the property. It is the co-owners’ or beneficiaries’ responsibility to establish that value through a credible method like an appraisal by a licensed appraiser.

ERP staff will attend the fair hearing to present DHS’ position on the value of the property.

Real property of a BadgerCare Plus member, whether non-probate or transferred by affidavit, is subject to a lien if the state’s claim cannot be satisfied through other assets.

DHS may not enforce the lien while any of the following survive:

1. Spouse,
2. Child who is:
   1. Under age 21, or
   2. Blind, or
   3. Disabled.

ERP will recover any funds that remain from a burial trust after costs have been paid.

Direct specific questions about questionable allowable costs to ERP staff.

33.3.7 Patient Fund Account

Nursing homes are required to notify ERP when a BadgerCare Plus member dies with money left in their nursing home patient fund account if they have no surviving spouse or minor or disabled child.

ERP will claim from the nursing home any funds remaining in the patient account after payment of funeral and burial expenses and outstanding debts from the last month of illness that are not chargeable to BadgerCare Plus.

33.3.8 Native Americans

Native Americans: Income, Resources and Property Exempt from BadgerCare Plus Estate Recovery

The following income, resources, and property are exempt from BadgerCare Plus estate recovery:

1. Certain income and resources (such as interests in and income derived from Tribal land and other resources currently held in trust status and judgment funds from the Indian Claims Commission and the U.S. Claims Court) that are exempt from BadgerCare Plus estate recovery by other laws and regulations;
2. Ownership interest in trust or non-trust property, including real property and improvements:
   1. Located on a reservation (any federally recognized Indian Tribe’s reservation, Pueblo, or Colony, including former reservations in Oklahoma, Alaska Native regions established by Alaska Native Claims Settlement Act and Indian allotments) or near a reservation as designated and approved by the Bureau of Indian Affairs of the U.S. Department of the Interior; or
   2. For any federally recognized Tribe not described in (a), located within the most recent boundaries of a prior Federal reservation.
   3. Protection of non-trust property described in (a) and (b) is limited to circumstances when it passes from an Indian (as defined in section 4 of the Indian Health Care Improvement Act) to one or more relatives (by blood, adoption, or marriage), including Indians not  enrolled as members of a Tribe and non-Indians, such as spouses and step-children, that their culture would nevertheless protect as family members; to a Tribe or Tribal organization; and/or to one or more Indians;  
3. Income left as a remainder in an estate derived from property protected in #2 above, that was either collected by an Indian, or by a Tribe or Tribal organization and distributed to Indian(s), as long as the individual can clearly trace it as coming from the protected property.
4. Ownership interests left as a remainder in an estate in rents, leases, royalties, or usage rights related to natural resources (including extraction of natural resources or harvesting of timber, other plants and plant products, animals, fish, and shellfish) resulting from the exercise of Federally-protected rights, and income either collected by an Indian, or by a Tribe or Tribal organization and distributed to Indian(s) derived from these sources as long as the individual can clearly trace it as coming from protected sources; and
5. Ownership interests in or usage rights to items not covered by #1 through #4 above that have unique religious, spiritual, traditional, and/or cultural significance or rights that support subsistence or a traditional life style according to applicable Tribal law or custom

Native Americans: Income, Resources and Property Not Exempt from BadgerCare Plus Estate Recovery

The following income, resources and property from the estates of Native Americans are not exempt from estate recovery:

1. Ownership interests in assets and property, both real and personal, that are not described in items #1 through #5 above.
2. Any income and assets left as a remainder in an estate that do not derive from protected property or sources in items #1 through #5.

33.3.9 Reparation Payments to Individuals

Government reparation payments to special populations are exempt from BadgerCare Plus estate recovery.

33.3.10 Voluntary Recovery (ERP)

When a member age 55 or older wishes to pay an amount to Medicaid to maintain Medicaid eligibility, prepay a Medicaid deductible, or reduce a potential claim in an estate, forward the payment to ERP. First check, BVCI to make sure there is not an outstanding Medicaid claim for an overpayment since the money should be applied to an overpayment first. Voluntary payments, except for prepayment of a deductible may only be up to the amount of Medicaid paid to date. 

The check or money order should be made payable to DHS.

Mail the payment to:

Estate Recovery

313 Blettner Blvd

Madison WI

53714-2405

With the payment, include:

1. Documentation that the payment is voluntary.
2. The member’s name and Medicaid ID number.
3. Name and address of the person who should receive the receipt.

These refunds will be credited to the member and will be used to offset any claim that may be filed in the member’s estate.

Incentive payments of 5% will be paid to the IM Agency for refunds.

Advise heirs and beneficiaries of deceased members who wish to make a voluntary refund to call ERP staff.

This page last updated in Release Number: 15-01
Release Date: 05/15/2015
Effective Date: 05/15/2015

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The information concerning the BadgerCare Plus program provided in this handbook release is published in accordance with: Titles XI, XIX and XXI of the Social Security Act; Parts 430 through 481 of Title 42 of the Code of Federal Regulations; Chapter 49 of the Wisconsin Statutes; and Chapters HA 3, DHS 2 and 101 through 109 of the Wisconsin Administrative Code.

Notice: The content within this manual is the sole responsibility of the State of Wisconsin's Department of Health Services (DHS). This site will link to sites outside of DHS where appropriate. DHS is in no way responsible for the content of sites outside of DHS.

Publication Number: P-10171