STEP 1: Treat your loved ones with the gift of financial security before it’s too late. No one can predict the future and safeguarding your assets is an important part of any long-term retirement plan. California has abolished the asset test for Medi-Cal eligibility and the look back period will no longer apply to transfers made on or after January 1, 2024. Thus, a gift of property or money now to loved ones may ensure that your hard-earned funds remain secure for them even after passing on.
STEP 2: With the passage of the Omnibus Budget Reconciliation Act, state Medicaid officials have the power to recoup any covered funds from your estate after you pass away. This means that unshielded assets could be lost for future generations unless proper steps are taken beforehand in preparation for nursing home care. Avoid Probate and keep your assets from being subject to a Medi-Cal reimbursement lien against your probate estate. California law only allows the Department of Health Care Services to collect a reimbursement lien against the assets that go through probate. Avoiding probate is the best way to avoid reimbursement to Medi-Cal.
STEP 3: Utilize a Trust. Your home is the biggest asset that can put you in probate and a trust in California is the only way to avoid probate and ensure that your assets are not available to pay back a Medi-Cal reimbursement lien against your probate estate and to leave your inheritance to your loved ones. Be sure to properly fund the trust and get professional advice.
STEP 4: Your monthly income determines how much you will pay for your stay in a skilled nursing facility; this is called the monthly resident cost and is treated much like rent. If you have a medically necessity to be in a skilled nursing facility, then to ensure your spouse’s financial security, consider transferring a portion of your monthly income to your spouse each month. The Federal Spousal Impoverishment Act provides legal protection for couples in this situation and can help balance out any gaps between the exempted amount set by the state and what is required to be paid for nursing home care if one partner requires it. This generous act helps secure spouses’ future economic well-being while they are using necessary resources like long term health services.
STEP 5: Under Federal and state laws, Medi-Cal recipients can allocate additional income for the support of a dependent “family member” when there is a community spouse at home. Family members include only natural or adopted minors or dependent children, or dependent parents or siblings of the institutionalized or community spouse who are residing with the community spouse. If you need to provide for an eligible family member, you need to allocate some of your income to a family member to provide for his or her care and to reduce your monthly resident cost.
STEP 6: The rules of Medi-Cal changed dramatically on January 1, 2024. Review any prior Medi-Cal planning to see whether it needs to be altered to allow for your maximum eligibility while guarding against a Medi-Cal recovery lien.
With the passage of the Omnibus Budget Reconciliation Act, state Medicaid officials have the power to recoup any covered funds from your estate after you pass away. This means that unshielded assets could be lost for future generations unless proper steps are taken beforehand in preparation for nursing home care.
