In California, we are very lucky that Medi-CAL Asset Protection Irrevocable Trusts can be established by seniors (or persons facing the need for long term care) who wish to protect their assets (including the family home) from recovery from the State. Generally, anyone that is considering this type of pre-planning 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 can not 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. 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 timeline as soon as possible.
At this moment we can help you set up an Irrevocable Trust and transfer assets into this trust. This process will help you 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 our staff.
We are passionate about helping families preserve their assets with the least amount of time and trouble. We offer free consultations to seniors and their adult children.