Elder law is about helping individuals and families face the challenges that come with aging.
Our services include working with seniors on their estate planning issues related to the preservation and transfer of assets and incapacity planning. We also help our clients plan for the possibility of needing additional care at an assisted living facility or skilled nursing home, by considering the options for long-term care insurance and Medi-Cal planning.
No one wants to live at a nursing home for any period of time. But more and more people are finding they or their loved ones need that higher level of care they can’t afford at home. While an individual’s stay at a nursing home often starts with Medicare paying the daily costs, Medicare is temporary at best. After Medicare the individual is left to pay the nursing home costs.
There are three primary means of paying for a nursing home: (1) long-term care insurance; (2) the individual’s income and assets; and/or (3) Medi-Cal. Long-term care insurance is not widely held due to its high cost. Paying for long-term care at a nursing facility can quickly deplete an individual’s assets as the average cost of a skilled nursing facility is over $8,000 per month.
Many people end up relying on government benefits under Medi-Cal, California’s version of Medicaid. Qualifying for Medi-Cal is dependent upon the amount of assets in an individual’s estate. Although, not all assets are considered. For purposes of qualifying for Medi-Cal, there are exempt and non-exempt assets. Exempt assets are not considered as assets that count against the Medi-Cal asset limitations. One example of an exempt asset is the individual’s primary residence.
When the individual’s non-exempt assets are greater than the allowed limits, the assets need to be spent down, or reduced, to qualify for Medi-Cal. This needs to be done carefully in a manner consistent with the numerous rules. One area where people get into problems deals with the gifting of assets. If assets are given away within 30 months of the application for Medi-Cal benefits, a penalty period is imposed on the individual so he or she does not qualify for benefits for a specific period of time. Transferring assets improperly, without the proper guidance can lead to significant and costly consequences.
Protection Against Medi-Cal Recovery Claims
An individual’s stay in a skilled nursing facility results in the payment of tens of thousands of dollars in Medi-Cal benefits. After a recipient of Medi-Cal benefits dies, the State of California has the right to seek recovery from the recipient’s estate. The recovery is from all assets, whether they were exempt or non-exempt assets. This includes the equity in your personal residence. With proper planning the assets subject to the Medi-Cal recovery can be significantly reduced. This includes protecting the family home from liens due to the state’s Medi-Cal recovery claim.
There are many tools available to protect your family’s legacy. Contact our attorney now to start planning to protect your legacy.