“The only thing that is constant is change.” ~Heraclitus
In our recent newsletters, we have been exploring and debunking many myths about the Medi-Cal Long Term Care program that seem to abound.
The focus of the most recent articles has been the myths surrounding the home, including the right of Medi-Cal to assert a claim against a Medi-Cal recipient’s home for the cost of the benefits conferred during his or her lifetime. The primary target for many Medi-Cal “recovery” claims is the personal residence. But it can also include financial assets such as bank accounts. In the past newsletters, we discussed the effective use of a special “house trust” (which is different from the standard living trust) to protect the home from Medi-Cal recovery.
While the above rules have been around for quite a while, Heraclitus’ insightful observation has been around even longer and has proven true as to the Medi-Cal program. Effective January 1, 2017, there will be new options to protect one’s assets, including the home, from so-called Medi-Cal estate claims. This is due to provisions in the new state budget bill signed into law by the Governor on June 27, 2016. These law changes will bring much needed relief to the survivors of a Medi-Cal patient.
Some key points:
- The new law applies to Medi-Cal recipients who die on or after January 2, 2017.
- There will be no claim against the estate of a surviving spouse
- The estate claims will only be asserted against only estates subject to probate. Because of this change, other assets, such as those held in joint tenancy, in so-called “pay on death” and “transfer on death” accounts and, for the first time, assets held in a standard revocable living trust will be protected.
- There is a new and more liberal hardship standard for modest estates.
What does this mean to you? The short answer is that it is good news for many folks who have needed the assistance of the Medi-Cal program. However, it has not eliminated the need for Medi-Cal planning nor, for many, the need to consider the use of “house trusts” and other planning tools that we regularly employ to assist families in preserving their hard earned assets.
Want to learn more? Need a refresher course on you long term care planning options? If so, sign up for our upcoming FREE long term care planning workshops. They will be held at our Sacramento office at 2277 Fair Oaks Blvd., Ste. 320 (near Howe Avenue) on Thursday, July 21st at 2:00 p.m. and Saturday, July 23rd at 10:00 a.m. To register, click HERE or call (916) 437-3500. Seating is limited and will be filled on a first come, first served basis. We look forward to seeing you again.
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