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Burbank Irrevocable Trust Attorney
Asset Protection Attorney
Burbank Elder Law Attorney

“Failing to plan is planning to FAIL.” - Ben Franklin

Irrevocable Trusts (Asset Protection Planning)

Pre-Crisis Asset Protection Planning for middle-class families is a critical part of today's priorities to protect the family estate to ensure that aging or sick loved ones will receive quality care while not subjecting themselves, their spouses, and their families to total financial impoverishment. Our Elder Law Attorney are dedicated to giving you legal strategies for maintaining control and protecting your assets, your life and your legacy!

Asset Protection Planning is critical part of estate planning for all families concerned about protecting real estate and liquid assets from lawsuits and Medi-CAL Recovery. If properly created in advance, most creditor issues may be avoided. However, this page is dedicated to Asset Protection as it relates to the issues of paying pre-planning to protect the family home and other assets while qualifying for Medi-CAL to pay for nursing home Long Term Care or custodial care.

This is not planning for families of extreme wealth that look at having assets moved to off-shore accounts. Our elder law practice focuses on long term care asset protection planning and we address how middle class families can get Medi-Cal to help pay for long term care (LTC) in a nursing home. Our goal is to make sure our clients can qualify for Medi-CAL , while legally protecting their home and other liquid assets.  Also if a senior is still driving it is important to protect major assets from lawsuits.  Business owners in risky business that can end up in lawsuits should also consider this type of asset protection trusts.

In this article we are specifically discussing Medi-CAL planning… however if you are a business owner or looking for major asset protection click here to find other information about Domestic/Off Shore Trusts.

Below is more information about how Medi-Cal Asset Protection Irrevocable Trust can save assets for your family:

Basically there are three (3) ways to pay for Long Term Care in Skilled nursing facilities.

1. Pay LTC costs through long term care insurance (if you are insurable and it is affordable) or

2. Pay LTC costs from your retirement savings (decreasing the amount of the estate your well spouse will have to live on and what your children will inherit)

3. Pay for LTC by relocating assets that enable you to apply for and qualify for government benefits such as Medi-CAL and Veterans Benefits (saving your estate and giving you and your family peace of mind). This is what our elder law attorney can help you with!

LA LAW Elder Law Attorney, Joseph McHugh and his team will help your family with pre-planning and/or crisis planning. Our law firm offers a variety of pre-planning techniques and opportunities currently available under California law. As with any area of law, these particular techniques require specific knowledge and training.

One of the most powerful legal tools we offer are IRREVOCABLE TRUSTS that can help in pre-planning and crisis planning for maximum asset protection.

Currently California is the only state that allows the amount of transfers into Irrevocable Trusts by stacked gifting as well as transferring the family home into the trust to ensure Medi-CAL CAN NOT RECOVER after the death of a Medi-CAL patient and/or their spouse.

What are Irrevocable Trusts?

Irrevocable Trusts are created to accomplish a wide variety of estate planning objectives and planning purposes. These objectives range from asset protection against creditors; to estate tax shelters; to qualifying for government assistance benefits for an ill person that needs long term care (Veteran's Aid & Attendance & Medi-CAL Programs); protecting assets against recovery from Medi-CAL; or protecting assets for a person with disabilities.

There are big differences between a Revocable Trust and an Irrevocable Trust. Basically the main difference is that a Revocable Trust does not remove asset from your name and control, therefore will be counted as assets you own and can be used for recovery of a debt.

This means:

• Medi-CAL and/or other Creditors can put a lien on a home or bank accounts owned by a Revocable Trust for your debts.

• Medi-CAL and/or other Creditors CAN NOT put a lien on a home or bank accounts owned by an Irrevocable Revocable Trust for your debts.

One of the most important functions of Irrevocable Trusts is Asset Protection in the event of a long term care illnesses, such as strokes, dementia, Alzheimer's, Parkinson's, etc. LA LAW Elder Law Attorneys help families place assets into a legally drafted Irrevocable Trusts, which will reduce assets in the name of an elderly or ill person and set them up to legally, qualify future eligibility for Medi-CAL (Medicaid) and Veteran's benefits. In this way, you are limiting the erosion of your estate's assets, savings and family assets (including the family home) for future needs, and ensuring an inheritance to your beneficiaries.

Who Should Consider a Medi-CAL Asset Protection Irrevocable Trust?

Medi-CAL Asset Protection Irrevocable Trusts should be established by older adults (or persons facing the need for long term care) who wish to protect their assets (including the family home). Generally, anyone that is considering this type of preplanning needs to have a sense of emotional security, because he or she must be ready to relinquish direct control over his or her assets. The control of these assets is turned over to a loved and trusted family member, who acts as trustee of an Irrevocable Trust. The trustee is in charge of guarding and distributing the assets in the Irrevocable Trust. Meanwhile, the person needing long term care continues to have direct control over his or her income, such as social security and pensions, as well as any assets chosen to remain outside the Irrevocable Trust.

Irrevocable Trusts have the additional benefit of passing assets to heirs (beneficiaries) of without requiring a probate. If needed, the Irrevocable Trust can set incorporate special purpose estate planning, such as Special Needs Trusts for heirs that are on SSI or other government programs; or Discretionary Trusts (Spend Thrift Trusts) for heirs that cannot properly manage their financial affairs.

Currently there is no waiting period for the transfer of assets to an Irrevocable Trust in the California Medi-CAL rules, as long as the asset reallocations are strategically planned and executed within the Medi-CAL Stacked Gifting rules. We are waiting for the DRA (Deficit Reduction Act) to be adopted by California, which is expected to require California to have a waiting period of more than 2 years after a transfer.

When the DRA is adopted we expect the stacked gifting to not be allowed, so it make sense to start transferring assets now to ensure you can protect you assets and qualify for Medi-CAL.

Once the DRA is adopted, there will be other options for asset protection but it will not allow the amount of asset that we can currently protect. So it is a good idea for anyone thinking they will need Medi-CAL in the next 5 years to help pay for long term care in a nursing home to do pre-crisis planning NOW! This means setting up an Irrevocable Trust and transferring the bulk of asset into this trust to start the time clock for Medi-Cal ticking as soon as possible.

At this moment you can set up an Irrevocable Trust transfer assets into this trust and qualify for VA and Medi-CAL benefits within a short period of time (the time it takes to make all transfers and stacked gifting processes guided by Joe McHugh, an experienced Elder Law Attorney.

What are the Steps for Creating Irrevocable Trusts?

Your Irrevocable Trust must have a customized plan suited to your family’s needs and personal objectives. Our Attorney that specializes in elder law will ask you a series of questions to determine how the Irrevocable Trust should be drafted to ensure it gives you maximum protection. Some of the questions will be:

• Do you want to prepare to qualify for Medi-CAL benefits in the future?

• Are you a veteran or a widow(er) of a veteran that may need Veterans Benefits to be attainable in the future?

• Do you need income from the assets after they are placed in the Irrevocable Trust?

• What asset controls do you want to retain? Understanding that all assets in the Irrevocable Trust cannot be controlled by you.

• Will you appoint an independent third party to have specific authorities to adapt the trust to unforeseen circumstances, such as future changes in the law?

• Can there be tax advantages built into the Irrevocable Trust?

• Do you need to draft any special needs protections for your heirs (beneficiaries of the trust) who are disabled or who may have creditor issues or who may be involved in a divorce?

• Who are the beneficiaries upon your death?

After you and your LA LAW Elder Law Attorney define the purposes for the Irrevocable Trust, then your assets need to be reviewed and analyzed. Only certain assets may need to go into the Irrevocable Trust. Also you and your attorney need to determine what is an appropriate amount of assets to place in the Irrevocable Trust an how must they be transferred to meet VA and Medi-CAL rules of eligibility. We stay every close with you as you make the transfers to ensure it is completed according to Medi-CAL rules to prevent penalties and blocks months of eligibility for Medi-Cal benefits.

Medi-CAL Asset Protection Irrevocable Trusts

What are the benefits of pre-planning before a crisis with Medi-CAL Asset Protection Irrevocable Trusts for Medi-CAL eligibility?

First, you are setting up a future that has certainty that you will qualify for Medi-CAL when a health crisis arises. You have a definite time line, beyond which you have a definite answer, meaning Medi-CAL eligibility. With assets protected in the Irrevocable Trust, future Medi-CAL eligibility may be as simple as filing a Medi-CAL application when you or your loved one is facing long care in a skilled nursing home. Furthermore, despite any law changes that occur making asset protection planning more restrictive, these will not affect you. For instance, if a residence, which is ordinarily exempt in almost all circumstances, becomes a countable asset after a short confinement to a care facility, having the residence assigned to the Irrevocable Trust protects that property – forever.

If the residence is in the Irrevocable Trust, it is protected against Medi-CAL Recovery after the Medi-CAL recipient has died. In California, a person in the Medi-CAL program can in most cases, transfer the residence into an Irrevocable Trust and it will be protected from recovery….saving the family home as part of the inheritance to your heirs.

Veteran’s Benefits Asset Protection
and the Irrevocable Trust

What are the benefits to planning ahead with Irrevocable Trusts for Veteran’s Benefits eligibility? Specifically, for Veteran’s Aid & Attendance benefits, the current VA rules do not have a waiting period before you can access the benefits because of transferred assets out of your ownership. This means you can transfer ownership of your assets to anyone or an Irrevocable Trust, without a waiting period. Joseph McHugh, the managing partner of LA Law Center, PC, has been certified with the Veteran’s Administration and is passionate about helping veterans protect their assets as they need more care. LA LAW Center wants to make sure that you’re planning for long term care, is a complete plan that covers both VA benefits as well as future Medi-CAL eligibility in the future.

I Thought The VA Allows Me To Gift My Assets
To My Children!

Why Should I Pay For An Irrevocable Trust?

You can qualify for VA Aid & Attendance benefits by simply giving away your assets to your children. However, by placing your assets in an Irrevocable Trust, you are not making an outright gift to your children and avoiding most of the problems with outright gifting. Your children cannot be tempted to spend these assets, even though they are supposed to hold the assets in case you need them in the future. More importantly in today’s society, your assets, owned by the Irrevocable Trust, are not subject to your children’s creditor’s claims or divorce. Also LA LAW Elder Law Attorneys do not want you to qualify for VA benefits in the wrong way and then create a MEDI-CAL TIME BOMB. The costs for skilled nursing home is significant and this may be the most important part of your asset protection planning!

Asset Protection Planning, whether in the context of Veteran’s Aid & Attendance benefits or Medi-CAL long term care, it is critically important part of your family’s estate planning. Generally, only Elder Law Attorneys understand the legal ways you can protect your hard earned assets and qualify for these care programs.

Seek Legal Council From an Experienced
Elder Law Attorney

If you are in need of Medi-CAL Long Term Care, you should avoid filling out a Medi-CAL Application on your own unless you are absolutely certain you qualify. Once you have submitted an application to the state, your asset reallocation and estate preservation options may have been eliminated or severely reduced. Joe McHugh is an experienced Elder Law attorney that can help you strategically “spend down your assets”, instead of paying all of your hard earned saving to the skilled nursing facility!

Successfully applying for Medi-Cal long term care assistance is a complex process that requires you to accurately fill out many government forms, providing proof of income and assets, dealing with the Medi-CAL eligibility workers in answering many follow up asset related questions.

If you have filed an application and were denied benefits, in most cases, LA LAW Medi-CAL Lawyers can help you appeal your case or reallocate your assets and then re-apply for Medi-CAL long term care.

After a thorough review of the best strategies for your family situation and our fees for the scope of work, we will structure a comprehensive estate plan created specifically to give you (or your loved one) the best care possible, while protecting your family assets and allowing you to stay in control of your life and your money.

Our Law Firm is located in Southern California; however, our Elder Law Lawyers serve many clients throughout the state and love an occasional road trip to help our clients, their family and friends.

Take advantage of a free phone consultation or appointment for a free 30 minute consultation to review your individual situation and determine if you would benefit from our experience and legal services.

Call us at: (818) 241-4238

 

We are highly experienced and caring law firm that has earned an excellent reputation as trusted California Estate Planning Attorneys, California Elder Law Lawyers, & California Assets Protection Attorneys - serving clients throughout California and specifically in Los Angeles County in Asset Protection, Probate, Wills, Living Trusts, Special Needs Trusts, Medi-Cal Asset Protection Irrevocable Trusts, Irrevocable Trusts, Charitable Remainder Trusts, Conservatorships, Guardianships, Medi-CAL Qualifications for clients with assets, protecting from Medi-Cal Estate Recovery, elderly care legal issues, Disability Planning. Our staff is trained to communicate with you making you comfortable about our progress and while we expedite your legal matters. Our clients are individuals and families generally located in Burbank-Los Angeles or Southern California area. We have successfully represented and assisted clients in Central and Northern California, as well as helping individuals in cities throughout the United States that have family members living in the state of California, with their legal concerns. We have a 100% success rate of helping families with assets qualify or keep Medi-Cal benefits in California. We occasionally love a road trip to help clients out of the immediate Los Angeles area.

 

 
 
 
 

Estate Planning, Elder Law, Medi-CAL Planning, Asset Protection, Wills and Trusts and Probate

LA Law Center, PC.,   3100 W. Burbank Blvd. Suite 201 Burbank, CA 91505   818-241-4238

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