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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 | Vol. 19 | June, 2007


What Happens if We Don't Die?

Mr. and Mrs. Wopsle. I recently met with a very nice couple who are in their mid eighties. I will call them Mr. and Mrs. Wopsle for convenience purposes. The Wopsles have four children and numerous grand children. The Wopsles are both in good health.

We reviewed their existing estate plan, which was set up many years ago. It is the typical plan which provides for distribution of the couple’s remaining assets, first to the surviving spouse, and then to the children and grand children. Their children are named as assuccessor trustees under the trust and are named as attorneys in fact on the financial and health care durable powers of attorney. For a “death plan” it seemed to be set up correctly.

We also reviewed the Wopsle’s assets, which consisted of their very nice home in Orinda, which they bought in the 60’s. They also have a modest amount of monetary assets in C.D.’s which are diminishing in value. They do not have long term care policies.

What happens if we don’t die? I asked the Wopsles if they had specific concerns about the way the estate plan was set up, and Mr. Wopsle sarcastically asked, “What happens if we don’t die?” He said that he knows everybody dies eventually, but that everybody is living longer and longer. Both Mr. and Mrs. Wopsle told me of their close relatives who are alive in their 90’s, and how other relatives lived almost to 100. The Wopsles’ concern is that they will become ill, outlive their assets and become a burden on their children. They are worried about how they would pay for their long term care and possibly a nursing home in future years. They also told me that it was important for them to leave something to their children, especially their home.

The Life Plan. I explained that I would make numerous changes to their estate plan to provide for asset protection and their future care. I suggested several changes that included adding provisions to the various documents to make it possible for them or their children to protect their assets and to apply for government assistance, like Medi-Cal, if needed at some point in the future. The language would also be effective in the event either of the Wopsles lost mental capacity.

Other provisions would provide for expanded “gifting and invasion” powers to prepare for Medi-Cal qualification. Provisions would also be added to allow for transfering of assets from one spouse to the other or to the children, and to transmute assets from community to separate property of either spouse. Special provisions would be added to provide for the protection of their Orinda home, but still keep it in the Wopsle family, in the event they went on Medi-Cal. Additional provisions should address what would happen if the well spouse died while the ill spouse was on Medi-Cal, and what would happen to the assets. Also, language should be added to allow for future trust amendments in the event of incapacity of either spouse.

Planning: As we have discussed, the Medi-Cal and asset protection rules change continually, and we are not certain what the status of the law will be in the future. However, we should do what we can in our estate planning documents to plan for the future.

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