When you are devising your estate plan, you may come to the conclusion that a revocable living trust would be a good choice as an asset transfer vehicle. Indeed, a living trust can be useful for a wide range of people, and you do not have to be extraordinarily wealthy to create a living trust.
One of the benefits that you would gain through the creation of a living trust is the avoidance of probate. This is the legal process of estate administration, and it is time-consuming and potentially expensive. The process would come into play if you utilize a last will, but assets in a living trust could be distributed to the beneficiaries outside of probate.
Another advantage is the ability to protect a spendthrift beneficiary through the inclusion of certain stipulations.
Medi-Cal Eligibility
Medi-Cal is a government health insurance program that can enter the picture late in your life, even if you are going to qualify for Medicare coverage when you reach the age of 65. This program is relevant to a significant percentage of elders, because it will pay for custodial long-term care. The majority of seniors will need some form of long-term care eventually, and Medicare does not pay for custodial care.
Since Medi-Cal is a need-based program, there is a limit on countable assets. For an individual applicant, this limit is just $2000 for unmarried persons. As a response, people who want to qualify for Medi-Cal to pay for long-term care often divest themselves of assets.
Assets that are in a revocable living trust would be counted if you were to apply for Medi-Cal coverage. This is because of the fact that you can in fact revoke or dissolve the trust, and you can also act as the trustee while you are alive and well. In essence, you are retaining ownership of the property, because you have the control.
However, this does not mean that you cannot use a trust to get assets out of your own name so you can qualify for Medi-Cal. In addition to revocable trusts, there are also various irrevocable trusts that you cannot dissolve or revoke. When you establish one of these types of trust, you are surrendering incidents of ownership. As a result, it would be possible to convey assets into an irrevocable Medi-Cal trust.
You would not be allowed to access the principal, but you could continue to receive income that is earned by the trust if you convey income producing assets into it.
Medi-Cal Planning Consultation
Our firm would be glad to help if you would like to discuss long-term care and Medi-Cal planning with an experienced and qualified elder law attorney. We offer consultations, and you can click the following link to send us a message requesting an appointment: Sacramento Medi-Cal Planning Attorneys.
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