An Irrevocable Medi-Cal Asset Protection Trust (MAPT) can be an effective estate planning tool for many families that are facing the need for long term care and need Medi-CAL to help pay for skilled nursing care in California.
This irrevocable trust offers an alternative to those that can not get or afford long-term care insurance, allowing individuals or married couples to move certain assets into this special trust that will hold and manage those assets throughout their lifetime and will not be counted as assets by Medi-CAL. There will be a trusted family member or assigned fiduciary to be the trustee (or manager) of the assets, including the family home. Then at the time of the individual’s death, the remaining assets can then be transferred to the heirs (beneficiaries) of the trust.
The control of these assets is turned over to the trustee of the Irrevocable Trust. The trustee is in charge of managing 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.
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 reallocation is strategically planned and executed within the Medi-CAL Stacked Gifting rules and we recommend that you always get guidance from an experienced elder law attorney! 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 5 years after a transfer.
So if you are expecting a potential medical situation due to family history (i.e., stroke, Parkinson’s, Alzheimer’s, etc.) you should consider setting up an Irrevocable Trust and protecting a good portion of your assets now. There are several other reasons to consider this asset protection type trust (seniors still driving, seniors being duped into signing away assets, etc.) as you get older and we are happy to discuss your options.
LA LAW Center has many years of experience in Medi-CAL Planning. We offer a free phone or office appointment to give you the opportunity to learn about asset protection, elder care and Medi-CAL qualifications. For more information call (818)241-4238 or go to www.la-lawcenter.com .