However, while there are solutions that may be employed in an emergency situation, the majority of specialists urge that you start Medi-Cal planning as soon as possible in life. People can find themselves in need of long-term care far earlier than they would have imagined feasible due to the reality that none of us can predict what the future contains in terms of health.
Because of the 30-month look-back provision and other issues that might develop if you wait until you are in imminent need of care, it is generally advisable to begin your preparation as soon as you are aware that you will require care. Transfers can be completed without danger of being penalized during this time period. Using the services of an expert Medi cal Planning Attorney Los Angeles, you may ensure that your future benefits are safe while simultaneously preserving your assets from nursing facility charges.
A Medi cal Planning Attorney Los Angeles in California Can Assist Me.
For many seniors, obtaining the Medi-Cal benefits they require may be a challenging task, which is why we at McKenzie Legal & Financial, understand. Because of this, our team collaborates closely with you to assess your circumstances and design the best approach to safeguard your assets while also assisting you in meeting those stringent income and asset limits. It is imperative that you begin preparing for Medi-Cal eligibility as soon as possible since nursing home prices are on the rise.
CHECKLIST FOR MEDI-CAL STRATEGY
Your complete estate plan should contain a number of components that work together to help you reach the interconnected goals you set for yourself in the plan. Medi-Cal planning should be included in this list for the majority of folks. For the simple fact that you or your spouse will most likely require long-term care (LTC) at some point throughout your lifetime, it is prudent to plan ahead of time.
Become familiar with the basics of Medi-Cal enrollment.
Medi-Cal planning has a number of objectives, one of which is to guarantee that you are eligible for Medi-Cal assistance whenever the time comes that you need it for LTC expenditures. Because of this, you should evolve acquainted with certain fundamental qualifying criteria.
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The applicant must be a resident of California.
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Be a citizen of the United States or lawfully present in the nation
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Depending on the program and household size, there is a maximum income restriction that increases every year.
As well as program and family size, the "countable resource" limit is determined. When determining the worth of your resources, some assets are exempt, which means that they are not included in the calculation.
Plan ahead of time — the Medi-Cal "look-back" period is five years.
Asset transfers when a person recognizes a need to qualify for Medi-Cal will not be successful.
Medi-Cal has a five-year "look-back" criterion, which examines an applicant's financial situation during the five-year period before his or her application for eligibility.
The value of any asset transfers done for less than fair market value during the 5-year "look-back" period may be reduced and the value of the item may be included back into your resources for the purpose of determining your eligibility.
Identifying assets that are free from taxation and those that are not
They are not in peril since they do not count toward your "countable resource" limit and are therefore exempt.
$2,000 for an individual, and $3,000 for a married pair is the general resource limit.
In addition, the following assets are free from taxes:
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There is no restriction on the principal dwelling.
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Equity in real estate other than one's primary house of a small amount ($6,000, but subject to change).
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Using real estate for a trade or company has no upper or lower bounds.
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The use of a single automobile
Jewels and personal effects having a net worth of less than $100, such as clothes, heirlooms, wedding and engagement rings, and other jewelry
Aspects of everyday life
Individual retirement accounts (IRAs), key employee benefit plans (KEGPs), and other work-related pension plans are used sometimes.
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Trusts for interment or prepaid burial contracts that are not revocable.
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One revocable burial fund or one revocable prepaid burial contract — up to $1,500 plus accumulated interest per individual — may be established in their name only.
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Items destined for the graveyard.
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Instruments of music.
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TVs, VCRs, laptops, weapons, and other recreational equipment, among other things
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Animals, poultry, or crops are all examples of farm products.
Advantage paid under a long-term care insurance policy that has been certified by the state are considered taxable property for tax purposes.
Individual life insurance contracts with a total face value of $1,500 or less, including interest and dividends.
Recognizing the importance of protecting non-exempt property.
If you make to qualify for Medi-Cal and your non-exempt assets are worth more than the authorized resources limit, your non-exempt assets will be at risk of being forfeited to the government.
The Medi-Cal program will place a waiting period on your benefits if your assets exceed the allowed amount.
It is established how long the waiting period will be by dividing the worth of your "excess" support by the average monthly cost of long-term care in your location. Consider the following scenario: if you hold non-exempt assets worth $150,000 and are applying as an individual, you will have $148,000 in "excess" assets. The waiting period is 16 months when divided by $9,000 (the average monthly cost of LTC).
During the waiting time, Medi-Cal will expect you to rely on those assets.
Without immediate action to safeguard those non-exempt assets, your retirement savings might be exhausted in a matter of months.
Medi-Cal Preparation Techniques
Despite the truth that every plan is unique, there are certain typical Medi-Cal planning tactics that you may want to consider using after speaking with your Medi cal Planning Attorney Los Angeles or other qualified advisor.
Gifting support to adult children or other beneficiaries during your lifetime can be a great strategy to remove non-exempt assets from your estate, as long as you begin before you reach the five-year "look-back" period.
The transfer of non-exempt assets into an irrevocable Medi-Cal living trust removes those assets from your legal estate; nevertheless, you can continue reap the benefits of those assets by earning interest on the assets held in the trust.
Transforming non-exempt assets into exempt assets can be effective in certain situations. Example: If you have cash (non-exempt) sitting in a savings account, you might use it to pay down the mortgage on your primary property because the equity in your primary residence is free from federal income taxes.
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