Medi-Cal can play an important role in paying for healthcare and long-term care for eligible California residents. For older adults and their families, however, qualifying for benefits is only one part of the impact that this resource can have on the future.
For example, Medi-Cal rules often intersect with the need for thoughtful estate planning decisions in ways that may ultimately affect property, inheritances, and what happens after a beneficiary dies.
What do you need to know?
Of primary importance in this context is Medi-Cal estate recovery. Under applicable rules, California may seek repayment for certain benefits from the estates of some deceased Medi-Cal beneficiaries. Estate recovery opportunities are generally much narrower than they were in the past, and are primarily limited to certain benefits received by individuals age 55 or older, along with specific circumstances involving permanently institutionalized individuals. Ultimately, whether recovery risks are likely to be a concern for a particular family depends on factors including the services received and the assets that become part of the probate estate.
Additionally, many people understandably worry that receiving Medi-Cal will automatically cause them to lose their house. That is an oversimplification of the risks at issue. Eligibility rules, ownership arrangements and estate recovery are separate concerns. In a nutshell, how a home is titled and how it passes at death can significantly affect the outcome. Seeking experienced legal guidance can help a family to clarify their particular risks accordingly.
Trust planning may be useful in some situations, but simply transferring assets into a trust does not automatically solve every Medi-Cal concern. The type of trust under consideration, timing of transfers, beneficiary provisions and other circumstances can result in important legal consequences. Giving property away without advice can also create tax, control and long-term care planning problems.
To that end, families should additionally coordinate Medi-Cal planning with wills, powers of attorney, advance healthcare directives and beneficiary designations. And, these determinations should be reviewed regularly. Medi-Cal rules have changed substantially over time, including major changes to California’s asset eligibility requirements. Estate plans based on outdated assumptions may therefore no longer accomplish their intended goals.