Under President Bush in 2006, the Deficit Reduction Act was signed into law. The goal was to prevent older adults from transferring large amounts of money and assets to others in order to qualify for Medicaid. An Elder Law Attorney can help you with this.
As the cost of long-term care increases, older adults only qualify for assistance once their bank accounts and many other assets have reached a threshold, around $2,000 in most of the U.S. To get access to Medicaid quickly, some older adults look at gifting their children large amounts of cash and other assets.
This deliberate deprivation of assets is not legal and can lead to being denied Medicaid or having to wait months or years to finally qualify. Your family might think they can get around it, but the government isn’t likely to overlook something. You need to take steps to avoid deliberate deprivation of assets.
Pay Attention to the Look-Back Period
When a person applies for Medicaid, all bank accounts and assets are scrutinized. Medicaid “looks back” at the money that’s been given away and asset transfers for a period of up to five years. Anything that is questionable is flagged and you must explain why someone was given that money.
California‘s look-back period is less restrictive at 30 months, but it’s still important as any property or asset transfer deemed as a “disqualifying transfer” extends the length of time Medi-Cal feels a person is ineligible for benefits.
When an elderly parent has a debilitating health issue like Alzheimer’s and needs around-the-clock care and supervision, being denied Medicaid’s help can be alarming. What can you do to help your parents protect their assets and follow Medi-Cal’s look-back period?
Make sure you’re working with an attorney that specializes in estate planning. An elder law attorney understands what can and cannot be done when it comes to preserving assets without raising red flags with Medi-Cal.
What Does This Mean For Californians?
In California, the amount is changing. In July, it will change from $2,000 (individual) or $3,000 (couple) to $130,000 (individual) or $195,000 (couple). Goals are to eliminate the limit in the upcoming years.
Shouldn’t this help? It might, but it all depends on what your parents own. Medi-Cal allows for one car and the primary home. If your parents have vacation homes, collect cars, and own land, those assets are extras that can count against them, and they’re likely to be valued at well over $195,000. Without an estate planning expert’s help, your parents could end up having to sell them.
Until then, your family benefits by working with an estate planning attorney who understands the costs of long-term care and how to protect assets through Medi-Cal planning. Take the steps to help protect your parent’s assets while ensuring they get the care they need.
Skyrocketing costs of long-term care are concerning, but the expert advice of an estate planning attorney makes a difference. Contact us to schedule a consultation with one of our elder law attorneys.
The Law Office of James Dolenga offers SSDI, SSI, Estate Planning, & an Elder Law Attorney in Ontario, CA. Call today for your legal consultation. (866) 772-5299
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