How to Preserve Your Estate When You or a Loved One Must Enter a Nursing Home
How will we pay for the cost of long-term care?
With rare exceptions, Medicare does not pay for the cost of long-term care. At most, it will pay for only a portion of your stay. Long-term care insurance can be expensive, and it may be difficult to obtain. Medi-Cal is a government program that will help you pay the cost of a nursing home once you qualify.
If we own a home, can we qualify for the Medi-Cal program?
Yes. A residence of any value is an "exempt" asset provided that the spouse lives in it or the nursing home resident intends to return to it. This means that its value is not included when determining your eligibility for Medi-Cal.
Other than our exempt residence, can any assets be preserved if a person is in a nursing home?
The spouse who is still living at home can keep $90,660 (in 2003) while the nursing home resident is receiving Medi-Cal benefits. If a court order allows it, even more can be kept in some cases.
Can our cash and other liquid assets be divided between two spouses?
There is no right to protect half of a couple's assets. The "at-home" spouse can keep $90,660 (in 2003). Everything beyond that amount, whether you consider it separate property or community property, must be spent on long-term care or otherwise exhausted (unless legally available planning steps are taken to avoid such losses).
Is the "at-home spouse" limited to $90,660 in cash and other liquid assets or can that spouse keep more?
Think of $90,660 as a minimum. It is possible in most cases to go to court or a "fair hearing" and obtain an order allowing the at-home spouse -- also known as the "community spouse" -- to keep much more than this. The protected amount may be double or even triple this minimum Community Spouse Resource Allowance (CSRA) figure.
Can the residence be given away?
California law currently allows transfer of the residence to anyone with no impact on Medi-Cal eligibility. One must be cautious in considering this approach. No action should be taken before consulting an attorney who is knowledgeable about Medi-Cal rules and regulations, tax and other implications involved in such a transfer. This is particularly important since the California policy which permits such transfers is in transition.
Can other assets be given away?
The institutionalized spouse can give any amount of money to the at-home spouse, keeping in mind the $90,660 limit on the amount of money that she can keep. Money given to anyone else will invoke the no-transfer rules. These rules provide that Medi-Cal will be denied for the number of months the gifted assets would have paid for nursing home care at the rate of $4,415 (in 2003) per month.
Can money be put into a trust to protect it from nursing home bills such that my spouse or I can still qualify for Medi-Cal?
Trusts are to be used carefully and rarely. Be sure to consult with us before putting assets into a trust.
When an application for Medi-Cal is submitted, what is the "look-back period"?
The Medi-Cal application asks about gifts made within the prior 30 months. This "look-back period" may be extended to 36 or perhaps 60 months if foreseeable changes in law are put into effect. This subject is very complicated, and every situation must be separately examined.
How much income can the "at-home" spouse keep when the other is receiving Medi-Cal?
The at-home spouse can receive the greater of all money that arrives in his or her name (the "name on the check rule") or $2,267 per month (in 2003). In some cases, special permission to keep more than $2,267 per month can be obtained by a court order or through a fair hearing.
Can I get reliable information from the Medi-Cal office?
A Medi-Cal office will give you basic information about the program but will not explain all of the asset preservation strategies that are available. To learn these, you should talk with an attorney who understands this very complicated and continually developing area of law.
Can Gilfix & La Poll Associates LLP attorneys advise about asset preservation strategies?
Yes. Gilfix & La Poll Associates LLP attorneys stay informed and teach other attorneys about this area of law and practice. An asset preservation plan that is most appropriate in your case can be developed by a Gilfix & La Poll Associates LLP attorney after a consultation in which your options are explored and explained.
Note: This article provides information, it does not constitute legal advice.
Gilfix & La Poll Associates LLP attorneys practice elder law and estate planning and are available to answer any questions about Trusts, Durable Powers of Attorney for asset management, Advance Health Care Directives, and any other appropriate planning options.