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How to Protect Your House Before and After Moving to an Assisted Living Facility or Nursing Home

Many people worry that they will have to lose their home and other assets to qualify for Medicaid, known as Medi-Cal in California.

It is not standard procedure for someone to be required to sell their residence in order to qualify for Medi-Cal coverage when they need nursing home care, because it is an exempt asset, its value is not counted in determining eligibility, but it's possible that the state will file a claim against that individual's home after they die.

If an individual uses Medi-Cal to finance nursing home care, the state will likely require that the individual's estate pay back what it can to cover these costs. "Estate recovery" happens when Medi-Cal goes after whatever assets remain in the person’s estate. In most cases that means a personal residence. That is why individuals who are considering entering a nursing home are strongly advised to work with an elder law or estate planning attorney before making any decisions, in order to protect their home and assets. The residence can be protected, particularly in California.

The federal Deficit Reduction Act of 2005 puts a limit on the value of a residence for a single person if it is to be considered exempt. Exempt status can be lost if the equity of the home is less than $500,000 (or $750,000, depending on the state). Regardless of the state, the resident is allowed to hold onto the home without an equity limit if their spouse or some other dependent relative resides there. California is yet to implement the DRA, so there is no limitation on the value of an exempt residence in California.

Some people choose to transfer their home to an adult child or other family member, in an attempt to protect it from Medicaid. Many states impose a Medicaid penalty period; they become ineligible for Medicaid for a set period of time. However, there are times when transferring a home is legal. Again, this is when consulting an elder law or estate attorney is in everyone's best interest. A home may be transferred without a transfer penalty to a spouse or to a child under the age of 21 or an adult child who has a disability, or to a caretaking child, or to a sibling who has resided in the home for a set amount of time prior to the individual's move to a nursing home or other institution and who hold s equity in the home. A home may also be transferred into a trust for the sole benefit of a disabled individual who is below the age 65. Each of these situations has restrictions and caveats, and should be run past an attorney.

Even more can be done in California. A residence can be transferred to any one or to any trust without a penalty period for Medi-Cal eligibility. This is largely because California has implemented neither the DRA nor other relevant provisions of federal Medicaid law.

Simply stated, the residence can be completely protected in California with property tax sensitive planning.

For information about how to protect your estate and assets, contact an elder law or estate planning attorney at Gilfix & La Poll.

Michael Gilfix is an estate planning attorney in Palo Alto California and is one of the pioneers of elder law. To learn more, visit Gilfix & La Poll Associates LLP at https://www.gilfix.com/.

March is Developmental Disabilities Awareness Month

Adults with disabilities and the parents of children with disabilities know all too well the barriers they face in getting a quality education or finding employment opportunities. Though the U.S. has made strides in support for people with developmental disabilities, there is still a long way to go.

President Ronald Reagan first proclaimed March “Developmental Disabilities Awareness Month” back in 1987. The move was a formal step in the deinstitutionalization movement that began in the seventies, and was part of a push to support "encouragement and opportunities" for people with developmental disabilities.

Education support for children with disabilities is fairly recent. Prior to the Education for All Handicapped Children Act (EAHCA), public schools in the U.S. generally accommodated only 1 out of every 5 children with disabilities. States could and did exclude children with certain types of disabilities from public school, including children who were blind or deaf, and children who were deemed "emotionally disturbed" or "mentally retarded." In 1975, when EAHCA was enacted, there were more than 1 million U.S. children with no access to the public school system, living in state institutions. There were also close to 3.5 million children who were in facilities with little or no basic education. More than 6 million U.S. children now receive special education.

In 2004, the Individuals with Disabilities Education Act (IDEA) was signed, which gave children with special needs the legal right to a "free and appropriate" education. Under both IDEA and EAHCA, special education services are required to meet the unique learning needs of each child with disabilities, for preschool through age 21, to prepare them for employment and independent living.

The IDEA was designed to address the educational needs of children with disabilities from birth to age 18, or 21, for 14 specified categories of disability. Parents and educators must work together to develop Individualized Education Plans (IEPs) to tailor lessons and approaches to work best with each student with special needs. But as children change school systems or graduate from one school to the next, their support network can be left behind. Students with special needs become adults with special needs, and the system is not equipped to support them adequately. Adults with special needs face a high unemployment rate, long waits for residential placement, and a maze of government bureaucracies they must navigate in order to qualify for benefits.

Michael Gilfix is an estate planning attorney in Palo Alto California and is one of the pioneers of elder law. To learn more, visit Gilfix & La Poll Associates LLP at https://www.gilfix.com/.