Medi-Cal Planning & Asset Protection
If you wish to protect your estate from being wiped out from expensive skilled nursing home costs, you need to consider the complicated yet often critical process of Medi-Cal Planning and Asset Preservation.
Medi-Cal asset protection generally takes one of two forms:
This applies when you or a loved one has already been admitted to a nursing home or is about to be admitted. I have a quick response system in place for crisis Medi-Cal planning, and can help you get answers quickly. I can often tell you within hours, not days, whether I can save you money. If you have a medical emergency that qualifies you for Medi-Cal, you take immediate steps to protect your assets, while remaining eligible for benefits.
Planning before the need for Medi-Cal arises
This entails estate planning ahead to make sure you will be eligible for Medi-Cal while still protecting your assets for your spouse or children.
Most people don’t have to go broke from in home or nursing home care. The Medi-Cal rules allows people to keep their homes and much of their money, if they know how and if they plan properly. but it is critical to have the assistance of an expert like me who knows how to do it.
There are two distinct programs within Medi-Cal:
The first program is the “Medical” Benefit, which acts as a temporary health insurance benefit. The asset qualification depends on single or married status.
The second program is the “Long Term Care” entitlement which will cover medical expenses but also help with Skilled Nursing Facility expenses and Hospice in most cases.
In California, If both spouses are in a nursing home their joint non-exempt assets cannot exceed $3,000.00. If only one spouse needs nursing home care the Community Spouse Resource Allowance (how much the couple may have in non- exempt assets) is $117,240. An example of an exempt asset, meaning one that will not be counted for Medi-Cal eligibility is the house you live in, one car, IRAs as long as the minimum mandatory distributions are being taken, a pre-paid burial plot, a term life insurance policy with a face value of no more than $150,000 as well as assets held by an irrevocable trust. This confuses many people who think that because their assets are held by their trust they are unavailable. That is not the case. Most trusts are revocable living trusts, meaning whomever established the trust can revoke it, change its terms or spend everything that the trust owns on a whim. An irrevocable trust takes those rights away. Since the assets are unavailable to the creator, they are unavailable for purposes of qualifying for Medi-Cal.
Medi-Cal for long term care also requires a share of cost. That means that all of the institutionalized person’s income except $35.00 will go to the facility before Medi-Cal will kick in any subsidy. Where there are two spouses, the non-institutionalized spouse is entitled to keep all of his/her income, even if it is $10,000 a month. At a minimum, that spouse is entitled to $2931.00. This is called the minimum Monthly Maintenance Allowance. Before the institutionalized spouse’s share of cost is taken, the stay at home spouse will get an allocation of his/her income to bring the stay at homes spouse’s up to $2931.00. If there is not enough income to do so, there is a way to keep more exempt assets so that they can be invested to create a larger income stream.
Sound confusing? It is unless you get some help from an Elder Law attorney experienced in asset protection and Medi-Cal planning. They will be able to evaluate your situation and explain the options you have to create or update your estate plan and to qualify you for Medi-Cal, and preserve your hard earned estate for your loved ones.