MEDI-CAL PLANNING APPROACHES
Pre-Planning for Medi-Cal
If you wait to plan until you really need Medi-Cal help, you face more difficult hurdles to qualify and often more limits on what you can protect for your spouse and heirs. Furthermore, no one should add the stress of crisis planning to a health care crisis that already stresses and strains everyone in the family. Finally, in crisis planning, the individual needing care often finds him/herself no longer able to participate fully in the planning.
Given these factors, we prefer to assist seniors with Pre-Planning for Medi-Cal. We use a broad range of traditional estate planning tools (including specialize trusts that work with the Medi-Cal rules for you) and special techniques for protecting assets, all coordinated with private insurance, veterans benefits and other resources. We can show our clients ways to obtain huge Medi-Cal benefits and still preserve several million dollars for a senior’s spouse and other heirs. However, some of the tools we use will become unavailable, or suffer significant limitations, once California adopts the DRA.
Crisis Planning – How to Qualify When You Need Help and Still Preserve Some Wealth
While the best results come from pre-planning, we still have many tools that will help you obtain eligibility in a crisis (i.e., when you need the care right now) without suffering financial ruin.
In these cases, we work closely with the senior who needs help, his/her spouse (if any), caregivers, social workers and others to help identify the best place for ongoing care.
At the same time, we help our client complete the Medi-Cal application (a daunting process), assure as many assets as possible remain exempt and can be protected from later recovery actions. Do not assume all is lost if you or your parent did not do effective pre-planning. With assistance from a skilled Medi-Cal Attorney, you can still get Medi-Cal coverage and protect very substantial assets.
Coordination with Tax Planning
Part of this planning involves getting assets restructured in a way that protects them from you needing to spend them on your own care, or from having them taken away when Medi-Cal seeks to recover its expenses after you are gone. The latter can look like up to a 100% death tax.
At the same time, we do not want you to need to make reportable gifts that might create gift tax liability, or do transactions that would increase your heir’s income tax liability. And, clients generally want to do all of this in a way that does not cause increases in property taxes or the loss of the step-up in income tax basis for their heirs at death.
Under current law we can:
Preclude recovery actions;
Preserve low property tax exemptions; and
Allow for a full step-up in basis for your heirs
all while getting up to hundreds of thousands, or millions, in Medi-Cal benefits for you.
If you want to “Plan Well” to protect your wealth from the threat of long-term care expenses, or you need to plan right now to deal with a crisis, I would be honored to help you understand your planning options and work with you on these complex issues.