For most people, the realization that a parent is showing early signs of dementia or Alzheimer’s Disease is not easy to accept. Along with the emotional aspect of watching a parent struggle with their loss of mental powers, there are typically a number of practical issues that must also be addressed. The knowledge that your parent will eventually need long-term care may cause concerns about how that care will be paid for unless your parent is fortunate enough to be independently wealthy. Many elderly individuals in California turn to the Medi-Cal program to pay for long-term care. Your parent must first qualify for Medi-Cal, however, for the program to pick up the costs of care. If you parent did not include Medi-Cal planning in his or her estate plan (which, unfortunately, is the case for most people with “standard” estate planning documents), you may wonder if you can still do such planning even though your parent is showing early signs of dementia. There is no simple answer to that question; however, it is still prudent to explore the available options.
To qualify for Medi-Cal, an applicant cannot have income or countable resources that exceed the program limits. As those limits are low, many applicants are denied coverage unless they started planning ahead of time by including Med-Cal planning in their estate plan. If your parent did not do that, there is a good chance that applying now will result in a denial. Medi-Cal will then require your parent to “spend-down” his or her resources before Medicaid will begin paying for care. In essence, your parent must deplete a lifetime of working and saving before receiving help.
Transferring large amounts of assets just prior to applying generally won’t work either as Medi-Cal uses a“look-back” period. This allows Medi-Cal to “look-back” into an applicant’s finances, which is currently up to 30 months prior to the date of application. However, an impending law change will extend that period to 60 months. Asset transfers that violate the Medi-Cal rules will likely be ignored and the value of the transfers imputed back into the applicant’s countable resources. This is why Medi-Cal planning should, ideally, be started well before before Medi-Cal might be needed. This does not mean, however, that nothing can be done now.
An experienced and qualified California elder law attorney may well be able to help by using some “eleventh hour” Med-Cal planning strategies. A countable resource might be able to be turned into an exempt resource, for example. The key at this point is to consult with an elder law attorney as soon as possible. Along with being concerned about the Medi-Cal rules, you must also be concerned about your parent’s mental health and ability to execute legal documents. At some point, your parent’s state of mind will likely prevent the execution of legal documents necessary to implement an effective Medi-Cal planning strategy.
For all of these reasons, when a family member has been diagnosed with early Alzheimer’s or dementia, it is critical immediately to consult with an elder law expert to discuss Medi-Cal planning strategies that remain available to you and your parent.