Medi-Cal and Two Cars?

For Medi-Cal qualification, one car is generally deemed exempt. We receive calls in our office, The Law Offices of Michael J. Young, 925-256-0298, www.WalnutCreekElderLaw.com,  from people telling us that they are going to immediately sell the second car.  They think they need to do this in order to create Medi-Cal eligibility for their loved one. We tell them that this may not be necessary, in that Medi-Cal allows you to have more than one car. The first car is exempt if it is used for the benefit of the applicant/beneficiary, or if it is needed for medical reasons. You can declare the most expensive car as the exempt car. The value of the second car, which is not exempt, will be added to the total value of the assets of the applicant. Remember that an individual applicant can only have $2,000 in non-exempt assets. A couple can have $2,000 in non-exempt assets for the “ill spouse” and $109,560 in non-exempt assets for the “well spouse.” The second car is not an exempt asset, and may have to be sold or transferred to create eligibility. 

If the applicant does not have a car, they can purchase a car to “spend down” assets in order to create Medi-Cal eligibility. There is no “look back period” for this purchase. When I mentioned this at one of my recent seminars,  one of the attendees jokingly asked if his parents could purchase a $1.5 million dollar Bugati automobile in order to create eligibility.  I suggested that if they could afford such a car, they probably wouldn’t be calling me, and also that the eligibility worker may view this as an abuse of the system.

This blog is for informational purposes only and is not legal advice. Please see an elder law attorney for your particular case.

By Elder Law Attorney Michael J. Young. The Law Offices of Michael J. Young is located at 1931 San Miguel Dr., Suite 220, Walnut Creek, CA 94596. www.WalnutCreekElderLaw.com, LawYoung1@Gmail.com. Serving Contra Costa and Alameda Counties, including Walnut Creek, Concord, Brentwood, Pleasant Hill, Alamo, Antioch.



A little known ”spend down” technique for Medi-Cal qualification purposes is the FUNERAL EXPENSE TRUST, also known as the FINAL EXPENSE TRUST. Medi-Cal allows for assets in any amount to be transferred from the Medi-Cal applicant to an irrevocable trust, to pay for the funeral expenses of the Medi-Cal recipient. This transfer does not create any periods of ineligibility for Medi-Cal qualification.

In our office, The Law Offices of Michael J. Young, www.WalnutCreekElderLaw.com, we routinely ask our clients at the initial meeting about their thoughts regarding funeral arrangements. We talk about burial vs. cremation, a traditional funeral vs. no funeral, or something in between.  We also talk about potential costs for final expenses. Many of our clients will transfer funds to the irrevocable trust to create immediate eligibility for Medi-Cal, without creating a period of ineligibility.

Other clients, and their families, just like the peace of mind, aside from Medi-Cal issues, in knowing that cash is available in the trust for funeral expenses.  These funds are protected from creditors, such as nursing homes, hospitals, etc., because the funds are in an irrevocable trust. There are no probate issues concerning the funds, and the fund is income tax free. The family can take the trust to any funeral home or cremation service, etc., in any state, and use the funds for their loved one. In addition, with the trust fund for funeral expenses in hand, it is easier for the family to shop for funeral services when the time comes. Of course, additional services can be purchased. Funds not used from the trust fund are available to the estate of the decedent and to Medi-Cal.

Your elder law attorney can provide more information to you about the final expense trust. Written by elder law attorney Michael J. Young, 1931 San Miguel Dr., Suite 220, Walnut Creek, CA 94596. www.WalnutCreekElderLaw.com mike@WalnutCreekElderLaw.com. 925-256-0298




www.WalnutCreekElderLaw.com. As we discussed in previous Elder Law Today newsletters, the Veteran’s Administration provides a wonderful pension benefit for those individuals who served at least one day during a period of wartime and are now disabled due to non-service connected reasons (aging related issues,  Alzheimer’s, Parkinson’s, multiple sclerosis, and/or other physical disabilities).  This pension, referred to as “Aid and Attendance Allowance”, may pay  the long term care provided in an assisted living facility, or in-home care.  

The “Aid and Attendance” (A and A) benefit is available to a veteran who is disabled and requires the aid of another person to perform the personal functions required in everyday living.  A veteran can show they are eligible if they have a substantial need for assistance with the activities of daily living.  Such activities include bathing, dressing, meal preparation, etc.  A veteran would also qualify for this pension if they can show they need the attendance of another person in order to avoid the hazards of his or her daily environment.  The need for assistance does not have to be permanent.

 Under this program, a veteran can receive up to  $1,644.00 per month or $19,736 per year in benefits, and a widowed spouse can receive up to $1,056.00 per month of $12,681 per year in benefits.  The applicant must be “permanently and totally disabled” under the VA rules.

The vet does not need to be helpless under the rules. He only needs to show that he is in need of aid and attendance on a regular basis. Someone who is housebound or in an assisted living facility and over the age of 65 is presumed by the Veterans Administration to be in need of Aid and Attendance.

Eligibility for the program is based on the income and assets of the veteran. In determining income, deductions are allowed for unreimbursed medical expenses (UMEs). In home care workers are an allowable deduction, provided that some medical or nursing services are provided. Also, the cost of an assisted living facility, or a portion thereof, can be an allowable medical deduction against gross income. 

 In addition, a family member can provide in-home care for a veteran who is applying for aid and attendance.  In order to meet the disability criteria, the care services provided by an unlicensed relative must be prescribed by a health care professional (ex. doctor, RN, LPN or licensed physical therapist) and the professional must consult with the unlicensed relative caregiver at least once a month (in person or by telephone) to monitor the regimen.  In addition, there must be a valid care contract in place and the caregiver must be receiving no more than fair market value for services he or she is providing.

If you or someone you know is a Veteran receiving care in an assisted living facility, or at home, please encourage them to file a claim for this benefit. It would be prudent to seek the guidance of an experiended elder law attorney who is accredited by the VA.

 CAVEAT: When planning for this VA benefit, you should also plan for Medi-Cal benefits and coordinate all of this with your elder law estate plan at the same time. An elder law estate planning attorney, who is also accredited by the VA, is best equipped to help you with this planning. When seeking help for this VA benefit, always ask if the person helping you is accredited by the VA.  

 The following are some additional requirements for eligibility:

 a. Be a veteran who served at least 90 days of active duty.

b. At least one day of active duty had to be during wartime: WWII – 12/7/41 to 7/25/47 – Korea – 6/27/50 to 12/31/55 – Vietnam – 8/5/64 to 5/7/75;

c. Does not need to have been in combat;

d. Discharged other than dishonorably;

e. Income less than $1,644 per month, once out-of-pocket medical expenses are considered.

f. Net worth less than approximately $50,000 for singles or $80,000 for couples.

g. Gifting of assets is allowed with no look-back period, but must be coordinated with Medi-Cal planning and gifting, which does have a look-back period.

 If you or someone you know is a Veteran receiving care in an assisted living facility, or at home, please encourage them to file a claim for this benefit. It would be prudent to seek the guidance of an experiended elder law attorney who is accredited by the VA.

Elder Law Today is written by Michael J. Young, Attorney at Law, 1931 San Miguel Dr., Ste. 220,  Walnut Creek, CA 94596. This information is for general informational purposes only, and does not constitute legal advice. For specific questions, you should consult a qualified attorney. MIKE@WALNUTCREEKELDERLAW.COM

For additional information, such as upcoming seminars, past newsletters, and to listen to an interview with attorney Michael J. Young, visit  www.WalnutCreekElderLaw.com.

Office: (925)-256-0298


Dates: Fridays, January 8 and 22, from 2:00 to 3:30 p.m. at the Law Offices of Michael J. Young, in the Channell Room. For reservations call 925-256-0298.

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