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Elder Law

Medi-Cal Asset Protection: What It Is and Why You Need It

Elder law is rarely straightforward, especially when it comes to Medi-Cal asset protection. Such protection ensures that you, your spouse and your family are not left with exorbitant bills or loss of assets due to the cost of long-term care

A Medi-Cal Asset Protection Irrevocable Trust can be a useful tool in avoiding this outcome. Below you will find important information regarding what Medi-Cal is, who needs a Medi-Cal Asset Protection plan, and more.

Table of Contents

What Are Medi-Cal Long-Term Benefits?

Elder law is rarely straightforward, especially when it comes to Medi-Cal asset protection. Such protection ensures that you, your spouse and your family are not left with exorbitant bills or loss of assets due to the cost of long-term care

A Medi-Cal Asset Protection Irrevocable Trust can be a useful tool in avoiding this outcome. Below you will find important information regarding what Medi-Cal is, who needs a Medi-Cal Asset Protection plan, and more.

Who Can Qualify for Medi-Cal Long Term Care?

Medi-Cal for long-term care is designed as a safety net for people who do not have the financial resources to be able to pay for long term care. There are strict eligibility requirements, which include the requirement that the long term care applicant has no more than $2,000 in total assets.

Not all assets are considered when determining Medi-Cal eligibility, so it can be a complex process to work out whether or not you qualify.

What is Medi-Cal Asset Protection?

Medi-Cal Asset Protection involves rearranging and restructuring your assets in a way that positions you to be able to qualify for Medi-Cal long term care. It does not require you to give everything away (which is the perception that many people have). Indeed giving everything away can be counterproductive. There are laws in place that penalize attempts to give away property purely for the purposes of qualifying for Medi-Cal. Any techniques adopted should therefore be discussed with your attorney.

Ideally the planning would take place in advance of an event that requires long term care. However, it is still possible to take action if long term care needs are immediate or imminent.

What Is an Irrevocable Trust?

When determining the most appropriate method of Medi-Cal Asset Protection, irrevocable trusts are often established. But what is an irrevocable trust, and how is it different from a revocable trust?

  • Revocable Trusts do not remove any assets from one’s name and do not change who controls the assets.
  • Irrevocable Trusts transfer assets to another person, which means that those assets are not deemed to be owned by the long term care applicant.

Who Needs a Medi-Cal Asset Protection Irrevocable Trust?

Medi-Cal Asset Protection Irrevocable Trusts are essential for Californians who need or may soon need long-term care in a nursing home but want their assets protected. This is an important step in preplanning, alongside care options, social security benefits, choosing a power of attorney, etc.

There is a misconception that Medi-Cal asset protection planning is only for those of modest means. In reality, the high cost of long term care can cause serious financial damage to families that most would not consider to be of modest means. For many California families, planning for a long term care event should be an important component of your overall estate planning. If your intention is to leave some kind of legacy for your family, that will not be possible if all of your life savings are used up due to the cost of long term care.

However, while preplanning will ensure that you are covered when the time comes for long-term nursing care, sometimes that is not always feasible. Incapacity can happen at any moment. In the event of a sudden need for long-term care in a nursing facility, it is important to speak with an attorney right away. Many facilities provide misleading information that makes families believe they are ineligible for Medi-Cal benefits, but this may not be the case.

Medi-Cal Asset Protection Irrevocable Trust Process

Medi-Cal planning for long-term care in a nursing facility can be an emotional ordeal. That is why it behooves family members to speak with an attorney to ensure the process runs smoothly. Our lawyers will start by listening and examining your current situation. From there, they will provide planning strategies tailored to your situation.

Those who are healthy enough to preplan for this event will go through the following four-step process to create their irrevocable trust.

  1. Develop an estate plan. The first step is to develop an estate plan before needing long-term care in a nursing home. At this stage, you will sign all documents necessary to give you peace of mind.
  2. Plan eligibility. Next, you need to make sure that you will be eligible for long-term Medi-Cal benefits. Necessary actions are taken to structure assets to ensure eligibility is met.
  3. Plan income. The third step is to ensure that proper income planning is conducted to reduce or eliminate monthly copayments while receiving Medi-Cal benefits.
  4. Medi-Cal recovery planning. The final step will minimize the risk that the government will be able to confiscate assets you leave behind in order to satisfy any payments they have made to long term care facilities on your behalf.

During the irrevocable trust planning stage, assets are often transferred to an irrevocable trust which is controlled by a trusted family member.

Working with a professional attorney to craft a Medi-Cal Asset Protection irrevocable trust is a sound option. Our trusted team will prepare Medi-Cal applications, ensure program eligibility, deal with Medi-Cal directly, and prepare estate planning documents. With our assistance, you can feel confident that your loved ones will be secure when they need long-term care.

Frequently Asked Questions

The best time to start a Medi-Cal Asset Protection plan is now. Waiting can make qualifying for Medi-Cal long-term benefits more challenging. Below you will find some of the most commonly asked questions regarding Medi-Cal Asset Protection in elder law.

When it comes to planning for a Medi-Cal Asset Protection irrevocable trust, it’s best to start sooner rather than later. Early planning will allow you to work with your attorney to establish documents that will be necessary later on if you become incapacitated and need long-term care in a nursing facility. Waiting until an emergency arises can leave you with limited options.

Yes. Even if you qualify for health insurance through Medi-Cal, you should still ensure that your assets are arranged properly for the purposes of long term care costs.

An irrevocable trust is one of the most effective ways to protect assets from nursing home costsor Medi-Cal recovery efforts. By transferring ownership of assets to an irrevocable trust, Medi-Cal will not consider those assets to belong to the applicant, provided that the asset transfers are structured properly. Note that penalties may apply if the asset transfers take place too close to the date of application for Medi-Cal.

If you are interested in more information or want to schedule a free consultation, you can write to us or call us at (858)-252-4768.

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