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"How to get Medi-Cal coverage for your nursing home care... without selling your home or leaving your family without a dime... Surprising ways to pay for your assisted living and long term care costs."

Elder Law Today Newsletter | July, 2013


Baby Boomers Take Advantage of Long Term Care Planning Options in Their Estate Planning Documents

In this issue we are taking a look at Baby Boomers and how they can benefit from updating their estate planning documents. According to the U.S. Census Bureau, Baby Boomers were born during the post WWII baby boom years from 1946 to 1964. Press accounts estimate that there were 76 million births during those years.

Many “Boomers” have children who are grown and may, like the undersigned, have grandchildren. Many Boomers have taken care of our their own children, and are now taking care of, or have taken care of, elderly parents. Many have struggled with issues over how to pay for nursing home costs and in-home care for parents, while trying to protect their parents’ home and their parents’
assets in the process. We want to make this process as easy as possible for our loved ones, who may take care of us when we are older. Fortunately, Boomers can now update their estate planning documents to include these long term care planning provisions.

When we Boomers were younger, our estate plans, including revocable living trusts and financial durable powers of attorney, were primarily geared toward what happens when we die. We were most concerned with how to take care of our children with our assets if we die and our children are still young. Now that we are older and have experienced the ageing process of our parents, we are concerned with what happens if we don’t die and become ill. We want to know how our in-home care, assisted living facility and nursing home costs will be paid for, and how we can preserve our assets for our loved ones in the process.

Updating Your Estate Planning Documents

The majority of estate planning documents, which include revocable living trusts and financial durable powers of attorney, do not have the appropriate provisions and language for government benefits planning and asset protection. Most of our clients want to be able to qualify for Medi-Cal, to help pay for a nursing home stay, and they want to protect their assets from a Medi-Cal lien if they die after having been on Medi-Cal.

The home is usually our clients’ biggest asset, and is the part of their legacy that they most want to preserve for their loved ones. By following the regulations for Medi-Cal planning, at the appropriate time, we can transfer the home to a spouse or a child, for example, as a gift, without a Medi-Cal qualification penalty. The transfer must be accomplished in a specific manner so that we avoid the various tax issues. This step will also protect the home from a Medi-Cal lien if you pass away after having been on Medi-Cal. However, if you lose capacity and we need to take these steps for you when a crisis occurs, we will be required to look at the language in your revocable living trust and financial durable power of attorney for the appropriate provisions. If your documents do not have these provisions, we will not be able to take these steps without going to Court. Court petitions are expensive, and results from various Courts can be difficult to predict.

Other Provisions for Making Gifts:

Medi-Cal regulations provide for gifting of other assets, but penalties can result from the transfers. If you lose mental capacity however, gifting may not be possible at all, unless you have the appropriate language in your estate planning documents.
Additionally, planning language for gifting of assets can be included in estate planning documents as part of qualification for the VA Aid and Attendance Pension benefit.

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