My mother wants to purchase a home from an annuity, but at her age would her investment be protected
A homestead interest in WI can be protected from creditor claims up to $40,000 by state statute. For purposes of counting the value of assets to determine Medicaid eligibility, certain assets are exempt, or not treated as "countable" assets. One exemption is a homestead of any value, if a spouse, minor children or "dependent relative" lives in it, or if the individual entering the nursing home intends to return home. The home equity exemption is limited, however, to $750,000. The limitation does not apply if the community spouse, a minor child or a blind or disabled adult child is "lawfully residing" in the home.
A trust may be created specifically to avoid ineligibility for Medicaid benefits. Too much in assets can keep you from qualifying for Medicaid. Medicaid's "lookback" period for all asset transfers is (5) five years, and the start of the penalty period for transferred assets is from the date of transfer to the date to when the individual transferring the assets enters a nursing home and would otherwise be eligible for Medicaid coverage.
There are various options available for estate planning, such as trusts, life interests, annuities, long-term care insurance, and others. Numerous advanced estate planning strategies are used to minimize estate and gift taxes. Due to the tax implications and complexities of the law involved, it is recommended you consult with a local attorney who can review all the facts and documents involved.
The following is a WI statute:
815.20 Homestead exemption definition.
(1) An exempt homestead as defined in s. 990.01 (14) selected by a resident owner and occupied by him or her shall be exempt from execution, from the lien of every judgment and from liability for the debts of the owner to the amount of $40,000, except mortgages, laborers', mechanics' and purchase money liens and taxes and except as otherwise provided. The exemption shall not be impaired by temporary removal with the intention to reoccupy the premises as a homestead nor by the sale of the homestead, but shall extend to the proceeds derived from the sale to an amount not exceeding $40,000, while held, with the intention to procure another homestead with the proceeds, for 2 years. The exemption extends to land owned by husband and wife jointly or in common or as marital property, and when they reside in the same household may be claimed by either or may be divided in any proportion between them, but the exemption may not exceed $40,000 for the household. If the husband and wife fail to agree on the division of exemption, the exemption shall be divided between them by the court in which the first judgment was taken. The exemption extends to the interest therein of tenants in common, having a homestead thereon with the consent of the cotenants, and to any estate less than a fee.
(2) Any owner of an exempt homestead against whom a judgment has been rendered and entered in the judgment and lien docket, and any heir, devisee or grantee of the owner, or any mortgagee of the homestead, may proceed under s. 806.04 for declaratory relief if the homestead is less than $40,000 in value and the owner of the judgment shall fail, for 10 days after demand, to execute a recordable release of the homestead from the judgment owner's judgment lien.