When you think about estate planning, you may not include the concept of Medi-Cal planning in that vision; however, maybe you should because there is a good chance you will need to qualify for Medi-Cal in the future. A comprehensive estate plan, when properly drafted, will contemplate both your future financial needs and potential threats to your estate assets and then proceed to plan accordingly. That is where Medi-Cal planning comes into the picture. An experienced California estate planning attorney from the Schomer Law Group can help you incorporate Medi-Cal planning into your estate plan.
What Is Medi-Cal Planning?
Medi-Cal planning is a separate, but inter-related, estate planning component that contemplates the need to qualify for Medi-Cal at some point in the future. As you age, the likelihood that you will need long-term care (LTC) increases with each passing year. With a nationwide average of over $80,000 per year, most people cannot afford to pay for LTC out of pocket. Unfortunately, both Medicare and most private health insurance policies exclude LTC expenses, leaving Medicaid as the only hope for assistance with those expenses should you find yourself in need of LTC. Qualifying for Medi-Cal, however, can be a challenge unless you planned ahead through the inclusion of a Medi-Cal planning component in your overall estate plan.
Medi-Cal Planning Strategies
Because Medi-Cal is intended to provide healthcare benefits to low income individuals and families, an applicant’s income and resources cannot surpass the established program limits. While some assets are exempt from consideration when calculating the value of your “countable resources,” after a lifetime of working and saving it is very likely that your assets will exceed the established limit without a Medi-Cal plan in place. That plan, therefore, will focus on ensuring that your non-exempts assets do not prevent you from qualifying for Medi-Cal if you need it during your retirement years. A common Medi-Cal planning tool used to accomplish this goal is a Medicaid trust.
A Medicaid trust is simply a specialized type of irrevocable living trust. Because the trust is irrevocable, any assets transferred into the trust will no longer be counted as part of your estate and will become trust assets instead. Consequently, those assets will not be included when determining the value of your countable resources for the purpose of determining your eligibility for Medi-Cal. The assets transferred into a Medicaid trust cannot be removed once transferred until they are distributed to the intended beneficiaries, such as your children. This means that you will not be able to reach the principal of the trust; however, you may still be entitled to benefit from the interest earned on the trust assets.
Contact the Los Angles Medi-Cal Planning Attorneys at Schomer Law Group Today!
At Schomer Law Group, we are committed to helping you with your Medi-Cal planning needs now and in the future. Contact the Los Angeles, California office today by calling (310) 337-7696 or (562) 346-3209 or by filling out our online contact form.
