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LA ELDER LAW

Joseph C. Girard, Esq.

Walter C. Whitaker, J.D., M.B.A.

August 15, 2014 for the

FINANCIAL PLANNING ASSOCIATION of VENTURA COUNTY

Phone: 310 823-3943 Fax: 310-822-6663

[email protected]• [email protected] www. LAElderLaw.com

4560 Admiralty Way, Suite 254 • Marina Del Rey, CA 90292

Medi-Cal for Millionaires: Don’t Lose Your Home or Savings

Presented by

mailto:[email protected]

http://www.laelderlaw.com/

http://www.laelderlaw.com/

They can take your home.

You must give your assets away to protect them.

After giving away your assets you must wait 36-

60 months to qualify.

Medi-Cal Eligibility Protecting your family & providing for your needs

Medi-Cal Myths

Testamentary Living Trusts

Revocable (Open Box)

Irrevocable (Closed Box)

Estate Planning Considerations Providing You Peace of Mind

What is a Trust?

Types of Trusts

Keys to an Effective Plan

Proper Asset Ownership/Title

Control of Process

Control What to Do

Control How to Do It

Control How to Pay for It


Personal Planning Goals

Catastrophic Illness Protection Remarriage Protection Creditor Protection (Medi-Cal) Divorce Protection Values Promotion


3 Considerations

of Medi-Cal Planning

for Catastrophic Illness Protection:

Qualification

Share of Cost

Recovery

Medi-Cal Eligibility

Nursing Home Care - Singles


Protecting your Family * Providing for your Needs

Asset limit $2,000

Plus certain Exemptions ONLY IF……

Nursing Home Care - Couples



Asset limit $115,920

($3,000 for In Home Care)

Plus certain Exemptions

In Home and Nursing Home Care



Exemptions:

Home (if single must intend to return home)

Car

Personal effects

Prepaid funeral account

Life Insurance Up to $1500 face value

How to “Spend Down”:



Look Back Date

Look Back Period

30 months

(but will change soon to be more restrictive)

Penalty Period/Waiting Period

Calculating the Spend Down:



Medi-Cal Reimbursement $7,549/month

Transfers Exempt vs. Non-Exempt

IRS gifts vs. Medi-Cal transfers

LAW : “Lookback” starts when

applicant resides in Nursing Home and applies for Medi-Cal Benefits

30 months

“Penalty” starts when gift/transfer is

made (current law soon to be changed!)

Runs at approximately $7,549/month



Recovery:

Law by which the state

of California may seek

reimbursement for

Medi-Cal benefits.


Property transferred prior to death

Life Insurance

Retirement Accounts

Assets Exempt from Medi-Cal Claim



RLT Revocable Living Trust

All Control

All Income

All Principal



Irrevocable Living Trust

No Control

No Income

No Principal



Controlled, Protective Trust

Medi-Cal Trust

Right to change beneficiaries

Right to change trustees

Right to invest and manage assets

Estate/Disability

Asset Protection

DAPT/iPug

Government Benefits

Medicaid/VA/SNT (1st and 3rd party)

Estate & Gift Tax Planning

Discount/Estate Reduction/Charity


How do you know what type of trust to use?

What type of protective planning am I doing?

Restatement Second of Trusts §156

“Where a person creates for his own benefit a Trust for support or a

discretionary Trust, his transferee or creditors can reach the

maximum amount which the Trustee under the terms of the Trust

could pay to him or apply for his benefit.”

Uniform Trust Code §505

“With respect to an irrevocable Trust, a creditor or assignee of the

settlor may reach the maximum amount that can be distributed to or

for the settlor’s benefit.”

Medicaid law (42 USC §1396p (d)(3)(B)(i)):

“If there is any circumstances under which payment from the Trust

could be made to or for the benefit of the individual, the portion of

the corpus from which, or the income on the corpus from which

payment to the individual cold be made, shall be considered

resources available to the individual.


Asset Protection Law

Home (to be discussed)

Other Real Property (Assessed value under CSRA?!?)

Business Property

Household Goods & Personal Effects

Jewelry

Single wedding, etc, heirlooms

Spouse

One Car


Medi-Cal Exempt Assets

Whole Life Insurance

(face value $1,500 or less)

Really cash surrender value

Term Life Insurance

Burial Plot (wife/kids/dogs?)

Prepaid Irrevocable Burial Plan

$1,500 Designated Burial Funds

$2,000 Cash Reserve

CSRA: $115,920

Cash (over limit)

Non-compliant annuities

Stocks

Other Real Property

Bonds

Trust Principal

Notes Receivable


Medi-Cal Non Exempt Assets

Convert Spend Down Transfer

30 month look back

Date of Transfer v. Date of Application

Still date of the transfer(s)

Period of Ineligibility

Runs from month of transfer

No partial months of ineligibility

Concurrent periods of ineligibility still in effect

Sample transfer of $12,000 in May 2013 ($12,000 ÷ 7,549 = 1.6 months)

May: ineligible

June: eligible


Transfer of Assets: 2013

Multiple Transfers: Total Amount = $21,000 May 15: $7,000 to Joe

May 15: $7,000 to Sue May 15: $7,000 to Amy

Period of Ineligibility $7,000 ÷ APPR ($7,549) = .93 month

0 months = periods of ineligibility

How calculated: Each transfer calculate separately. Transfer periods run concurrently.

May: eligible (as long as under $2,000 asset limit in May)


Transfer of Assets: Sample #2 (2013)

Spouse (while alive) but, not if receipt by distribution or survival, then after death of surviving spouse (did not transfer interest)

Minor (under age 21) – if minor at time of death

BLIND OR DISABLED CHILD of any age Does not have to be an heir

Does not have to be living in the property

Verification of SSI or SGA as of date of claim

Plus, birth certificate or adoption papers

Establishing Disability through DSS If earned income does not exceed federal SGA limit

No time limits for DSS to determine disability


Exemptions from Recovery

After Notice of Death, claim must be filed by State

Probated Estate: within 4 months

(PC §9202)

Trust Estate: within 4 months

(PC §19202(b))

Non Probated Estate: within 3 years (PC §215 & CCP §338 3 years to file suit: Shewry v Begil)


Estate Recovery

Filing Deadlines

Surviving Spouse

Claim against spouse at his/her subsequent passing

Surviving Minor (under age 21)

Blind of Disabled Child (any age)

SSI or SSA Determination (or any other

documentation) or can request from Determination

from State


Estate Recovery

Complete Bars to Recovery

How to pay for supplemental needs

How to plan for Medi-Cal while grantor

or spouse remains in the home

Does the plan allow for access to equity

Is there an exit strategy for changes

or regulations


Transfers and Access to Equity

Irrevocable transfer of

residence to anyone is ok

Consideration of ethical issues

concerning transfer of home


Transfer of the Home

Current Law in California

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