Many people who call our office are under the belief that because they have a revocable living trust, that their assets are exempt from Medi-Cal qualification. They also believe that their revocable living trust protects their assets from a Medi-Cal lien from recovery to the State after they die. Both notions are incorrect.
When qualifying for Medi-Cal, all assets in the name of the applicant, including those in the applicant’s revocable living trust, are counted. If assets are held in a revocable living trust created by a husband and a wife, all of the assets in the trust are counted towards qualification, whether the applicant is the husband or the wife. If you pass away after having been on Medi-Cal, all assets in your revocable living trust are subject to recovery. If there are no assets in your revocable living trust when you die, there can be no recovery against the trust.
In order to gets your “Ducks In a Row” for possible Medi-Cal qualification and protections of assets, your revocable living trust should be updated so that it contains the requisite asset protection and government benefits planning language. In the event of your incapacity, this language will allow your fiduciary, usually your spouse or another loved one, to gift assets or transmute (transfer) assets, pursuant to the Medi-Cal regulations and California law, in order to qualify for Medi-Cal. The majority of revocable living trusts do not contain this language.
If you have an irrevocable trust, the assets in that trust may or may not be counted toward Medi-Cal qualification. And, the assets in the irrevocable trust may or may not be protected from a Medi-Cal lien after you die. The irrevocable trust should be examined by a qualified elder law attorney in order to make that determination.
This information is not to be taken as legal advice, and you are encouraged to see your elder law attorney. At the Law Offices of Michael J. Young, at 1931 San Miguel Dr., Ste. 220, Walnut Creek, CA www.WalnutCreekElderLaw, 925-256-0298, lawyoung1@gmail.com we practice Elder Law and we help Baby Boomers and families through the Elder Care Journey. We help families with long-term care planning, asset-protection plans, comprehensive estate planning, wills, trusts and powers of attorney. We also help Baby Boomers and families get their “Ducks in a Row” in order help them qualify for Medi-Cal and the VA Aid & Attendance Improved Pension benefit.