Modern Estate Planning Blog

When we meet with seniors, one of their top concerns is protecting their inheritance for their family should they ever require nursing home care.

Unfortunately, these conversations often come at a time when a senior is already experiencing health concerns and will need long-term care in the near future.  Sometimes, when there’s loss of mental capacity, it’s even too late to plan.

However, for seniors who are still of sound mind, or those that have the right authorities in their current estate plan, California is a state that currently permits crisis planning for Medi-Cal benefits.

The goal in crisis planning is to preserve and protect as much income and assets as permissible under the law for the benefit of the senior, a healthy spouse and his or her heirs. California is seeking to tighten the reigns on crisis planning, but for now there’s a limited window of opportunity to protect hard earned assets from nursing home costs.

Unlike Medicare, which does not cover long-term care, Medi-Cal will pay for nursing home costs when a senior can no longer carry out the activities of daily living (ADL’s) such as:

• Bathing
• Dressing
• Continence and Toileting
• Medication Management
• Transferring
• Eating

Many seniors assume that they will not qualify for Medi-Cal because it is a “need based program,” and in a lot of cases, this is true. Just having a limited amount of assets or income is enough to be disqualified on a financial basis.

But don’t count yourself out just yet!

With the use of legal tools such as irrevocable living trusts, seniors can place their assets “in trust” for their loved ones and the assets will no longer count as theirs for Medi-Cal purposes. Implementing this strategy often gives seniors peace of mind knowing their assets won’t get swallowed up by nursing home costs (which can run in excess of $8,000 per month here in Sacramento!) and that they will pass safely and legally to their family should they require extra care.

However, the senior will no longer “manage” these assets, so it’s important to speak with a qualified Medi-Cal lawyer before implementing such a strategy. Choosing the right trustee is critical in ensuring the senior’s wishes are honored if and when they relinquish this control.

The best way to see if Medi-Cal planning is right for your family is to sit down with a lawyer who can crunch the numbers and let you know what it will take to qualify for benefits. He or she can also advise you regarding gifting strategies, look-back periods and other penalties that may impact your particular case, and together you can create a solution that is right for your situation.

If you need help getting started, we invite you to call our Fair Oaks Estate Planning and Elder Law firm to schedule a consultation. Simply call (916) 241-9661 to reserve your space.

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