Medi-Cal is a government program that is relevant to many seniors who were never poor, although it is a need-based program. This is because Medi-Cal pays for long-term care, and most seniors will need it at some point in time. Medicare does not pay for living assistance.
Since Medi-Cal is a need-based program, there is an asset limit. For an individual who is applying for Medi-Cal coverage to pay for nursing home care, the limit on countable assets is $2000.
A Medi-Cal trust can be utilized if you want to get assets out of your own name so that you can qualify for Medi-Cal to pay for long-term care as a senior citizen. A Medi-Cal trust is going to be an irrevocable trust. The designation is more or less self-explanatory: You cannot revoke or rescind an irrevocable trust. Once it is in place, you cannot change your mind, dissolve the trust, and take back direct personal possession of the assets.
Though you do surrender control of the assets that you convey into a Medi-Cal trust, you could create an income-only Medi-Cal trust. This is also an irrevocable trust, because Medi-Cal would count assets that are in a revocable trust.
Though you cannot take back the principal that you convey into an income-only Medi-Cal trust, you would be able to continue to receive income that is earned by the trust on an ongoing basis. This can provide an effective solution for people who feel as though they need the income. The downside to this arrangement is the fact that the income would probably go toward the cost of your long-term care if you are eventually enrolled in the Medi-Cal program.
Learn More About Medi-Cal Planning
As we have stated previously, most seniors will need long-term care before all is said and done. It is not easy to pay for nursing home care out-of-pocket, because the average annual charge is over $90,000, and it exceeds $100,000 in many areas of California.
Medi-Cal is the solution for a very significant percentage of California residents who are residing in nursing homes. If you want to be prepared for the future as you preserve resources for the benefit of your loved ones, you should certainly gain a thorough understanding of the program rules and regulations.
We are offering a very valuable resource if you would like to obtain more detailed information about nursing home asset protection and the Medi-Cal program. Our firm has prepared an in-depth report on the subject, and you will be able to go forward with a solid foundation of knowledge if you digest the information that is contained within this report.
The report is free, so there are no risks involved. To get your copy, visit this page: Sacramento CA Medicaid Planning.
To learn more, please download our free Medi-Cal Planning in California here.