Making an estate plan is one of the keys to ensuring your future financial stability. Estate plans can consist of many different documents ranging from a Last Will and Testament to a Power of Attorney for Health Care to a revocable trust or an irrevocable trust. The goals of your estate plan will dictate the types of documents and strategies you use will need to employ. One goal that needs to be considered if there is a long-standing illness that requires long-term care, is Medi-Cal planning.
Medi-Cal is the program run by the State of California for administering federal Medicaid funds. Medicaid (and therefore Medi-Cal) is a need-based program that provides health care coverage. One essential piece of coverage provided by Medi-Cal is long-term nursing home coverage. Medicare and most private insurance does not cover long-term residential care above a limited number of days. For nursing home care, unless you have purchased a specific policy to cover that care, Medi-Cal may be a planning option. This means that if you do not qualify for Medi-Cal, you will be paying out of pocket for nursing home care, which can cost upwards of $10,000 per month.
Without proper estate planning, you will be spending all of your hard earned assets on nursing home care. This is because there are specific caps for eligibility. If applicants have too many assets, they will be required to “spend down” their assets below this cap before they are eligible to receive Medi-Cal. Fortunately, there are specific strategies that you can employ to recharacterize your assets. Sales of assets, leases, or transfers can change the nature of your assets such that they are no longer part of the eligibility calculation, allowing you to still enjoy the benefit of your assets while also qualifying for Medi-Cal. However, Medi-Cal eligibility is subject to a thirty month look back period (an possible up to 60 months), meaning that certain types of transfers or gifts made within that period will not be effective to remove those assets for your estate for Medi-Cal eligibility purposes.
Estate planning is also vital to protect against the Medi-Cal Recovery Law. After you pass on, without the proper estate planning, Medi-Cal can try to recover the money the program spent on your care from your estate. There are certain techniques, such as placing your home in a revocable living trust, that can help protect against the recovery while still allowing you to qualify for Medi-Cal benefits.
Ask our experience California Medi-Cal attorneys to help you with your estate plan and secure your family’s future. Call us today for an appointment.
