Medicaid: Divestment

Divestment is when you or your spouse:

  • Give away income and/or assets for less than fair market value.
  • Avoid taking income or assets you are entitled to, such as a retirement income or inheritance.
  • Buy certain types of assets, such as:
    • Annuities.
    • Life estates.
    • Loans.

This page is meant to explain divestment at a high level, and explore some common examples of divestment. Each situation is different, and not everyone will have a penalty. Use the contacts at the bottom of this page to get help with your own situation.

Divestment affects when you can get Medicaid long-term care benefits

Divestment can make it take longer for you to get long-term care benefits. If you’ve had a divestment within the past 60 months when you apply for Medicaid, you may have a penalty period.

What Medicaid services can I get during a divestment penalty period?

During a divestment penalty period, Medicaid may still pay for things like doctor visits and lab work.

During a divestment penalty period, Medicaid will not cover long-term care services, like:

  • Adult day care.
  • Changes to your home to make it more accessible.
  • Supportive home care.
  • The costs for services provided by a nursing home.

What is fair market value?

Fair market value is about how much you could have sold an asset for on the open market. Divesting happens when you instead gave the asset away or sold it below market value.

For more information

Print the Wisconsin Medicaid Divestment fact sheet, P-10058 (PDF)

Last revised January 2, 2025