WHAT YOU DO NOT KNOW CAN HURT YOU!
More Information on Protecting Your Home From Recovery & Having Medi-CAL Benefits to pay for Nursing Home Care!
You can qualify for Medi-CAL with Your Home in Your Name, because it is an “Exempt Asset” but watch out for Medi-CAL Recovery after death!
The state of California will try to seek Medi-CAL Recovery from any real or personal property or any other assets in which the individual had any legal title to or interest in at the time of death claim for any money spent by Medi-CAL on both spouses.
This includes assets listed in living trusts, joint tenancies, tenancies in common, life estates that are considered “revocable,” and assets received by a surviving spouse by distribution or survival, e.g., assets left by a will or community property. (Property in a Medi-CAL Asset Protection Irrevocable Trust is not recoverable!)
What are Medi-CAL Recovery Claims?
After the death of a Medi-Cal beneficiary, the State of California can make a claim against the estate of a beneficiary who was 55 years of age or older at the time he or she received Medi-Cal, or any age if he or she received Medi-Cal benefits in a nursing home. No claim can be made there is a surviving spouse, a minor child, or a blind or disabled child of any age. The State will wait until spouse dies and then make a claim for recovery.
How to Avoid a Medi-CAL Recovery Claim?
The best way to avoid a Medi-CAL Recovery claim is to have nothing in the Medi-Cal beneficiary’s estate at the time of death. Medi-CAL Recovery Unit can only place a claim for the amount of Medi-Cal benefits paid or the value of the estate, whichever is less. The Medi-CAL Beneficiary’s “estate” is legally defined as what assets are in the beneficiary’s name at the time of death. So transferring any assets in the estate before death will reduce the amount of the claim.
The main asset in a Medi-Cal Beneficiary’s estate is generally the home. Protecting the home from recovery is legally accomplished with some type of legal transfer of title out of the Medi-CAL beneficiary’s name and spouse’s name. Any such transfer should be discussed with a qualified Elder Law Attorney knowledgeable about Medi-Cal and the tax considerations related to real estate transfers.
Your Home is “Exempt” During Your Life, but Can be Medi-CAL Recovery Claim After Death of You and Spouse.
It is important to understand that a home may be “exempt” for Medi-Cal eligibility purposes, BUT it is not exempt from Medi-CAL Estate Recovery. Any assets left in a Medi-Cal beneficiary’s name at the time of death will be subject to an estate claim from the state of California through the Medi-CAL Recovery Unit. So it is important to take care of this as soon as you get qualified for Medi-cal Benefits!
The Medi-Cal program rules require the applicant (and spouse) have a limited amount of assets. However, your home is exempt (or not considered part of countable assets) when applying or on Medi-Cal under any of the following circumstances:
- The home is inhabited by the Medi-cal beneficiary’s sibling or child who has lived in home continuously for at least one year before the date the Medi-cal beneficiary entered the nursing home.
- When away from house, including being in a nursing home, the Medi-cal beneficiary intends to return home, and states this in writing (in Trust or Life time occupancy agreement).
- If the Medi-cal beneficiary’s child is under age 21, or “dependent relative” continues to live in the home.
- There are legal obstacles preventing the sale and the Medi-cal beneficiary provides evidence of attempts to overcome such obstacles.
- The home is a multiple dwelling unit and one unit is the principal residence of the Medi-cal beneficiary.
Beware of keeping the house in your name and your spouse’s name. Medi-Cal allows you transfer the house since it is an Exempt asset. Always have an Elder Law attorney help with this to make sure it is completed properly with capital gains and other tax issues reduced or eliminated! Remember if it is in your name or a living trust… the state of California will recover all money paid by Medi-Cal for nursing home care.
So, before you gift your family home, please talk to an elder law attorney, who can advise you on the best method for asset protection and making sure your home to properly transferred to your children or loved ones.
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.
For more information go to www.la-lawcenter.com or call us at:
Local Phone: (818) 241-4238 or
Toll Free Phone: (877) 537-8283