Elder law attorneys help clients address the legal and financial challenges that they may face during their senior years. The most significant threat is related to living assistance, and unfortunately, many people do not acknowledge it until it is too late.
According to the Department of Health and Human Services, 70 percent of seniors will need help with their activities of daily living, and more than half will need paid long-term care. This starts to make sense when you learn that the life expectancy for a 67-year-old woman is 87 years.
Medicare is the health insurance provider for most older Americans, and it is a solid source of coverage all things considered. However, it will not pay for a stay in a nursing home, and it does not cover in-home custodial care that is provided by a professional health aide.
It is not easy to pay for long-term care out of your own pocket after you have been retired for a couple of decades. You can expect to pay over $100,000 for a year in a nursing home in the Burbank area, and the costs are likely to rise over the coming years.
The Medi-Cal program will pay for long-term custodial care if you can gain eligibility. Since it is a need-based program, there is a $2000 limit on assets, but some things that you probably own do not count.
One vehicle is not counted along with wedding rings, engagement rings, and heirloom jewelry. An applicant can maintain possession of personal belongings and household items, and prepaid burial plots are exempt.
You can have unlimited term life insurance because it does not have a cash value, and $1500 worth of whole life is allowed. The same amount can be saved to help cover your final expenses.
If you own your own home, it would not be counted if you apply for Medi-Cal to pay for long-term care. There are equity limits in other states, but there is no limit in California.
Even though you can potentially become eligible as a homeowner, it is not an ideal arrangement. Medi-Cal is required to seek reimbursement from the estates of deceased beneficiaries, so a lien can be placed on your home if it was in your direct possession at the time of your passing.
Healthy Spouse Allowances
When a married person is seeking Medi-Cal eligibility while their spouse can still live independently, there are allowances for a healthy spouse. One of them is the Community Spouse Resource Allowance which is equal to half of the countable assets up to a limit.
Income that is earmarked for the spouse that is in a nursing home must be used to defray the costs, but there is an exception if a healthy spouse needs the income. They can continue to receive it in the form of a Monthly Maintenance Needs Allowance.
Medi-Cal Trust and the 30-Month Look Back Period
You can convey assets into an irrevocable Medi-Cal trust to develop a financial profile that will lead to eligibility. Your home could be placed into the trust along with income-producing assets and other valuable property.
Timing is key to the successful execution of the strategy. There is a 30-month look back period, so you have to fund the trust at least 30 months before you apply for Medi-Cal.
We Are Here to Help!
If you take the right steps in advance, you can enjoy your golden years in comfort and protect your legacy from potentially devastating nursing home expenses. We can evaluate your situation and help you devise a plan that is ideal for you and your family.
Please call us at (818) 937-2335 if you are in the Burbank, Los Angeles, Pasadena, or Irvine areas so that we may setup an appointment to learn about your situation and how we can help you.