| HOME MAY NO LONGER BE ‘EXEMPT ASSET’ FOR MEDI-CAL ELIGIBILITY |
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There is “breaking news” in the California State Legislature and you do need to know about it. The transfer of assets from parents to children or to others is covered in part in legislation having to do with administration of the law regarding Medi-Cal benefits. Until now, one’s home has been considered an “exempt asset” and under federal Medicaid statutes and California state regulations could be transferred to anyone without penalty with certain safeguards. Proposed revisions in the regulations concerning transfer of property in California have now been drafted which would impose restrictions upon such transfers. Under the new regulations, a home can only be transferred to a select group of relatives which exclude a large segment of children who normally do not reside with their elderly parents. In essence , your home would no longer fall in the category of “protected assets.” In fact, there is a provision within the proposed, revised regulations that would require investigation of any and all transfers over the prior three year period to determine if the transfers were only done for the purpose of establishing eligibility for Medi-Cal benefits. The presumption written into the regulations is that this is the case and there is no real way to rebut, or change, this conclusion. Hence the person seeking eligibility is going to be disqualified. Transfer and Gifts Will Become Over-inclusive The definition of transfer of assets has been greatly broadened so that it now goes far beyond the gifts intended This not only affects property transfers but every single sale, purchase, exchange or conversion by the applicant during the three years prior to the application. It is noteworthy that nowhere in the federal regulations, requirements or guidelines is there any burden that the applicant prove that any transfers done for less than “adequate” consideration were not made on the basis of establishing eligibility for benefits under Medicaid. The California State Legislature, however, has proposed that this burden be imposed upon the people of the State of California, making it harder than ever for some applicants seeking Medi-Cal benefits to succeed. The upshot, of course, is that one’s home can become a resource for paying the high costs of Nursing Home Care and no longer a protected asset that can be passed down from parent to sibling through the generations. Protect Yourself with an Irrevocable Trust There is a solution to these proposed regulations which any individual can implement now, before the regulations are finalized, approved and begin to govern our lives. One of the best solutions is to establish an Irrevocable Trust. If an Irrevocable Trust is established before any such regulations can be put in place, your property and your home and what is to happen to it is set down as if in stone, it cannot be revoked or taken away or altered by the changing winds of regulations in the legislative arena governing Medi-Cal benefits and Medi-Cal administration. This is a rather complex procedure but it can can be done pretty fast. We are expert in this area of law and have successfully handled estate planning and nursing home care situations on a routine basis for many years. Now with the impending threats of the revised Medi-Cal regulations, it would be unwise to leave your situation unprotected and your home and assets at risk when you can secure everything if you act in time. The new regulations have not gone into effect yet and so there is still a little time, but you do not want to get caught off guard, learning only too late that these new requirements are now in place and you are too late to protect what is rightfully yours. The time to act is now, while you can still protect your home and properties.
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