Medi-Cal Planning

Several strategies can be deployed depending on what is best for you. While the list below is NOT exhaustive, these strategies may be used alone or in combination with one another. 

Non-Crisis Medi-Cal Planning Strategy

Amend your Revocable Living Trust to include Medi-Cal Planning provisions. This will give the person you select the power to accomplish the Medi-Cal planning to preserve your assets should you ever need nursing home care. Without specific Medi-Cal planning provisions, no one would be able to protect your assets from the Medi-Cal spend-down  law.

If you are NOT in a crisis situation, then a Medi-Cal Protective Trust can work well to protect the home. This trust must be established at a time when the home has an “exempt” status. After funding the home into a protective trust, the home will be exempt from all future Medi-Cal liens and claims.

Additionally, the purchase of a long-term care insurance policy for at least a 36-month period of time, would allow you to establish a Medi-Cal Trust and “wait” the 36 months while your nursing home care is being paid for by LTC insurance.

Crisis Medi-Cal Planning Strategy

If you are in a crisis situation, but the ill person (whether married or single) is still mentally competent, then a Medi-Cal Protective Trust can still be established to protect the home. Again, this trust must be established at a time when the home has an "exempt" status. Again, after funding the home into such a trust, the home will be exempt from all future Medi-Cal liens and claims.

If you are in crisis and need to qualify for Medi-Cal immediately or in the near future, your planning must be done with an attorney who is familiar with this area of the law such as a Certified Elder-Law attorney with the National Academy of Elderlaw Foundation in Tuscon, Arizona. What remedy is available depends upon your family situation, and the nature of your assets. One myth must be dispelled. Even in crisis planning, the home and most of your other assets can be protected from Medi-Cal liens, and preserved for your child or children to inherit. Whether Court action is necessary to preserve your assets and prevent any Medi-Cal liens depends upon the facts of the particular case. Nevertheless, the sooner you plan ahead, the less costly the Medi-Cal plan will be.

If the person in need is mentally incompetent, then all of the Medi-Cal planning will have to be accomplished through a court proceeding called a conservatorship.  Still, the home and many assets can be protected.

Because it is not possible to set forth all of the many different types of examples that we see in our office, let it suffice to say that there are many, many ways to plan for Medi-Cal protection, but each case is unique.

Medi-Cal planning is separate and apart from Revocable Living Trust Planning. A Revocable Living Trust escapes probate and capital gains taxes, but does NOT protect against Medi-Cal liens. (see Revocable Living Trust).

Scenarios to think about for your Medi-Cal Strategies

• Administrative Fair Hearings and/or Court Hearings to increase the resource allowance (CSRA) beyond the $104,400 allowed by Medi-Cal

• Court Hearings to increase the monthly income allowance beyond the $2,610 per month for the year 2008

• Lifecare contracts where a child or other individual is committed to caring for the parent in the home

• Sales with self-canceling installment notes

• Motion for Substituted Judgment where transferor lacks mental capacity.

• Transferring non-exempt assets into exempt assets

• Long-Term Care Insurance

• Medi-Cal Protective Trust

• Sale with leaseback provisions

• Supplemental Needs Trust set forth in a Will

• Medi-Cal Annuities which used to be a viable alternative are now subject to D.H.S. claims.

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