In this series of posts we will focus on Medi-Cal for our over-65 clients who need assistance with long-term care. We will take you through the laws and what we do for our clients, from the initial meeting until we receive that eligibility letter, to help them qualify, apply for and receive Medi-Cal, for long-term care.
The Initial Appointment – Gathering Information
Every client’s case is different, of course, but our over-65 clients come to discuss Medi-Cal planning with us for a few common reasons. In our initial meeting we must uncover what exactly their situation is so that we can recommend solutions. One common scenario is our client has recently discovered he has a degenerative illness, such as Alzheimer’s disease, and he and his wife are worried about their future, worried about spending all their savings at the rate of $10,000 or more per month for the husband’s long-term care. The client may be unmarried with a similar diagnosis and not wanting to burden her children if she runs out of money paying long-term care expenses.
A third scenario involves a client already in a nursing home, already paying unbelievable amounts of money for care every month, and the spouse or other family members are in a panic. Each of these cases presents us with a different set of possible solutions to explore and we must ask lots of questions, including:
What Kind of Care is Needed?
Medi-Cal provides a wide variety of services that fall under the umbrella of long-term care. For those who would otherwise require nursing-home level care but prefer to and are able to remain in their homes with the available support, Medi-Cal has a number of Home and Community Based Services (HCBS). Which programs are available varies by county. Some programs directly provide support through agencies that contract with the county. Some programs allow the Medi-Cal recipient to hire caregivers they select themselves, which could be friends or family members. For some of our clients, remaining in their home is just not possible. Medi-Cal also provides support to those in need of nursing-home level care in nursing homes.
What Planning Do We Have or Can We Do?
One very important preliminary step is to make sure we have the legal ability to do planning, now and in the future. As long as our client has the mental capacity to do the necessary planning, everything is fine. However, if our client no longer has the mental capacity necessary to understand the work we do and to participate in the planning, we check documents- trusts and power of attorney- to see if someone else has been granted the power to do planning.
Medi-Cal planning often requires our clients to give away their property. This power to give away property is often not included in trusts and powers of attorney. Two very common misconceptions: husbands and wives can do just about anything with each other’s property, especially in a community property state like California; and all powers of attorney are the same. The law, however, is that without your written authorization nobody, not even your spouse, can legally give your property away to anyone, including themselves. To do so without proper authority could be considered theft and elder financial abuse and it would not be recognized as a completed gift for Medi-Cal eligibility purposes.
What we need to see is a written power of attorney that authorizes someone else to give away our client’s property in order to qualify for Medi-Cal. This is not a power that is granted in most powers of attorney. If the client has a trust, then his trust must also authorize his trustee to give away his property, which, again, is not a common trust provision. If our client has not given these powers to anyone and still has the capacity to do so, creating an appropriate power of attorney and trust language is usually one of the most urgent items for us to do. If our client does not have capacity some planning options will not be available.
Most clients who are considering applying for Medi-Cal are also interested in avoiding Estate Recovery. As we will discuss in more detail in a later post, payments made by Medi-Cal on behalf of the recipient can be recovered from his probate estate upon his death. The need to create an estate plan that avoids probate is obvious here. When our client has capacity or another person has legal authority through a power of attorney, we will want to create a revocable living trust and make sure it owns all appropriate assets.
In our next post we continue to explore the preliminary questions we cover in our first meeting with our clients.