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Medi-Cal Estate Planning for Long-Term Care

California Medi-Cal Planning & Asset Protection

The goal behind Medi-Cal estate planning is to protect your home and other assets from being consumed by long-term care costs. Keep in mind that nursing care can exceed $200,000 a year and most people who suffer a catastrophic illness or disability are forced to apply for Medi-Cal. In 2011 the applicable law in California is still the Medicare Catastrophic Coverage Act (MCCA) of 1988. Under MCCA, there are certain planning techniques that we can use to protect your home from a Medi-Cal estate claim. We can also avoid a spend down of your money and other assets and help you to qualify for Medi-Cal without triggering a period of ineligibility for Medi-Cal benefits.

The much tighter rules under the Deficit Reduction Act (DRA) of 2005 will not go into effect until final regulations are adopted in California. The state statute implementing DRA (SB 483) makes these rules effective only prospectively and not retroactively. Presently, the draft regulations are being informally circulated.  Therefore, we anticipate that the draft regulations will be issued shortly followed by a period for public comment and revision before the final regulations are adopted in California. Although time is of the essence, there is still a window of opportunity to implement Medi-Cal estate planning under the much more client friendly MCCA rules. Don’t wait until it’s too late! The Department of Health Services (DHS) has a very aggressive recovery unit. Without proper planning, DHS will go after your home in order to satisfy their claim for the amount of money they paid out.

Medi-Cal Planning Call to Action

John Zarcaro has prepared a client letter to help you understand the changes in California's new Medi-Cal law. Feel free to download our Long Term Care Planning letter and Contact Us for more information.

Medi-Cal Planning & Eligibility

You don’t have to lose your home or spend down your money to qualify for Medi-Cal. We can help you protect your home and other assets with a long-term care estate plan designed to facilitate eligibility for Medi-Cal benefits without having to spend down your money or other assets on nursing home care. We can then assist you with the Medi-Cal application process to qualify you for Medi-Cal.

Generally, a long-term care estate plan will utilize a Medi-Cal Asset Protection Trust to protect your home from a Medi-Cal estate claim. Another aspect of this planning incorporates a gifting strategy together with the creation of a Supplemental Needs Trust to hold your money for your benefit. The Supplemental Needs Trust also will avoid Medi-Cal estate recovery and will provide the money for those services Medi-Cal will not pay for such as a private room or for a care manager. This is a much better outcome than having to spend down all your money on nursing home care (before Medi-Cal will pay) with no money left over to supplement your care. Also, you cannot rely on social security or other retirement income to supplement your care, because all your income, except for $35 a month, must be used to pay the nursing home. This is called “share of cost.” Thus, the more retirement income you have the greater is your share of cost and the less Medi-Cal will pay.

A Living Trust will not protect your home from a Medi-Cal estate claim. Nevertheless, your Living Trust should include Long-term Care Catastrophic Coverage Powers and other provisions to allow your agent under a General Durable Power of Attorney to carry out Medi-Cal estate planning. Also, your General Durable Power of Attorney should include provisions which expressly authorize your agent to carry out Medi-Cal estate planning in the event you are ill or disabled and lack the capacity to carry out the planning yourself. Contact us for a Free Consultation to learn more about the planning techniques we use to protect your home and other assets from the high cost of nursing care.


California Attorney John Zarcaro with Zarcaro & Associates, A.P.C., assists clients in Carlsbad, Rancho Bernardo, Mission Valley, La Jolla, Del Mar, Oceanside, San Diego, North San Diego County and the surrounding area with Estate Planning, Elder Law, Long-Term Care, Medi-cal, Wills, Living Trusts, Irrevocable Trusts, Business Exit Planning, Asset Protection, and California Probate and Estate Administration.

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John Zarcaro - 2710 Loker Ave. West - Suite 380 - Carlsbad, CA 92010 - Phone: 760.918.0929 - Fax: 760.918.0639 - Toll Free: 800.878.0743 - Email: info@zarcaro.com