Many older Americans will someday need help with their activities of daily living, and long-term care is very expensive. Many older Californians ultimately try to qualify for Medi-Cal coverage, because Medicare does not pay for long-term care. Medi-Cal does pay for custodial care if you can obtain eligibility.
You are probably aware of the fact that Medi-Cal is a government program that provides health insurance for people with very limited financial resources. There is a limit on countable assets of just $2,000 for an individual applicant, but some things that you own are not considered to be countable, including your home.
Plus, if you need long-term care while your spouse is still capable of independent living, your spouse would be to keep half of the shared countable assets, but there is a limit. This is called the Community Spouse Resource Allowance, and the limit for 2015 is $119,220 in the state of California.
This figure is the maximum, but it is also the minimum Community Spouse Resource Allowance. A healthy spouse can keep no less than $119,220, even if it is more than half of the shared countable assets.
When it comes to countable assets that you have in your possession, you could potentially give gifts to your loved ones so that you can stay within the $2000 limit. However, in the state of California, there is a 30 month look back that you would have to contend with if you want to give away assets to qualify for Medi-Cal.
In many cases, gift giving must be completed at least 30 months before you submit your application if you want to obtain eligibility in a timely manner. Californians get a break for the time being on this level, because the look back is five years in other states. There are, however, effective legal strategies to give away assets within the 30 month period provided that very specific guidelines are followed.
Clearly, direct gift giving is a possibility. However, it is also possible to convey assets into an irrevocable Medi-Cal trust if you want to become eligible for the program. With this type of trust, you could not access the principal, but you could create an income only Medi-Cal trust. You could continue to receive income from the earnings of the trust, but the principal would not count against you for Medi-Cal eligibility purposes.
Schedule a Consultation
We have provided a brief look at the Medi-Cal program as it applies to long-term care in this blog post. The program is very important to a significant percentage of senior citizens, so you should learn all that you can about it if you want to be appropriately prepared for your elder years.
If you would like to discuss matters with an experienced and qualified elder law attorney, contact us through this page to set up a consultation: Sacramento CA Elder Law Attorneys.