Term Life Insurance: You can have any amount of term life insurance and still qualify for Medi-Cal to help pay for your nursing home costs. For example, lets say that you have a $100,000 term life insurance policy that provides for a distribution of $100,000 to your wife when you die. You can apply for Medi-Cal and still be eligible with this policy. When you die, the $100,000 passes to your wife.
Elder Law Planning Issue: However, there are planning issues to take into account regarding term life insurance policies. What happens if your wife becomes ill first, and she qualifies for Medi-Cal. If you die while your wife is on Medi-Cal, the distribution from your life insurance policy will pass to your wife and most likely make her ineligible for Medi-Cal. A remedy for this situation, which should be part of your Medi-Cal pre-planning with your elder law attorney, is to change the beneficiary designation on your life insurance policy to another person, like a child. If you have lost mental capacity, this may not be possible unless you have special powers in your financial durable power of attorney to make beneficiary designation changes on your life insurance policies. You should not assume that just because you have a financial durable power of attorney, that it includes powers for your fiduciary to change the beneficiary of your life insurance policy. Pre-planning with your elder law attorney will help you to determine this and to plan accordingly.
Whole Life Insurance: You can qualify for Medi-Cal if you have a whole life insurance policy, provided that the face value, or cash in value of the policy, does not exceed $1,500. Any amounts over the $1,500 is counted toward the $2,000 cash reserve that you are allowed to keep under the Medi-Cal qualification regulations. As a result, if the cash value of your policy takes you over the $2,000 cash reserve, you will not be eligible for Medi-Cal unless you reduce the cash value of the policy and transfer or gift the excess amounts to your spouse or to another person. You should be able to do this through the life insurance company, provided that you have sufficient mental capacity to do so. If you do not have sufficient mental capacity, your fiduciary must rely on the powers in your durable financial power of attorney. Unless your Medi-Cal qualification attorney has prepared your financial durable power of attorney, it will most likely not have gifting powers for asset protection and Medi-Cal qualification.
Pre-planning With Your Elder Law Attorney: Pre-planning for your long term care and asset preservation should be accomplished as soon as possible, through your Medi-Cal qualification attorney. The language that is used for asset protection in the revocable living trust and financial durable powers of attorney is indeed different from regular estate planning documents. Your Medi-Cal qualification attorney can help you get your ducks in a row for qualification for Medi-Cal and the VA Aid & Attendance Pension benefit, and for preservation of your assets for your spouse and your loved ones.
Michael J. Young, your Medi-Cal qualification attorney in Walnut Creek, CA can help you get your ducks in a row for government benefits planning and for asset protection. You should accomplish your long term care planning as soon as possible, because if you lose your mental capacity, long term care planning and asset protection becomes much more difficult. You should not assume that the provisions in your existing revocable living trust and financial durable power of attorney will help you to qualify for Medi-Cal or the VA Aid and Attendance Pension Benefit if you lose capacity.
Michael J. Young, Medi-Cal qualification attorney in Walnut Creek, CA is an elder law attorney, senior law attorney, Medi-Cal attorney and probate attorney. Mr. Young is certified by the VA and is a member of the National Academy of Elder Law Attorneys (NAELA). For additional information, please visit our website at www.WalnutCreekElderLaw.com LawYoung1@Gmail.com Our address is at 1931 San Miguel Dr., Suite 220, Walnut Creek, CA 94596. 925-256-0298. Mr. Young serves Contra Costa and Alameda Counties, including the cities of Alamo, Walnut Creek, Concord, Danville, Pleasant Hill, Brentwood, Antioch, Clayton, etc. Mr. Young advises clients regarding Medi-Cal, Probates, Probates with Real Estate, Medi-Cal, nursing home costs, asset protection, the VA Aid and attendance pension benefit, and long term care planning. Mr. Young is an Elder Law Attorney and Probate Attorney with offices in Walnut Creek, CA. Walnut Creek Elder Law Attorney, Walnut Creek Probate Attorney. Senior Law Attorney. Walnut Creek Medi-Cal attorney.