Medi-Cal considers its payments to be a loan, and if no Medi-Cal planning is done, Medi-Cal will seek to recover its payments from any assets that remain after the death of both the ill person and their spouse.Medi-Cal planning involves a series of careful legal steps to help an ill person qualify for Medi-Cal while keeping as many assets as possible for the use of the ill person, their spouse, and any dependent children. The planning also focuses on a process to transfer assets to the children before the death of the ill person and their spouse, so as to protect those assets from later Medi-Cal reimbursement claims.

If you think it is likely that you, your spouse, or your parent will need nursing home care within the next few years, now is a good time to begin Medi-Cal planning; the sooner planning begins, the greater the protection that can be obtained.

San Diego Law Firm has years of experience handling Medi-Cal planning  and can help you with each step of the process.  We can prepare all necessary legal documents, help you qualify for Medi-Cal while protecting your assets, arrange for transfer of title to assets, protect you as much as possible from income, gift, and property tax consequences of Medi-Cal asset transfers, and develop a strategy that ensures your stability in the present and protects your family’s future inheritance.  If you are considering nursing home care for yourself or a family member and would like to qualify for Medi-Cal payments for that care, or if you are already struggling with a Medi-Cal application, please call San Diego Law Firm today at (619) 794-0243 to schedule an appointment.  We can help you.

Decide if you want your agent’s powers to start now, or later

Just as important as what your agent can do is when they can do it.  A power of attorney can give your agent power right away, or hold off until a future event or condition happens.  We’ll explain the benefits and drawbacks with either option.  Your decision will depend on who you will name as your agent and your personal circumstances.

For example, take a look at the following scenarios:

      ●    Illness, Medical Conditions, or Accidents

You can have your power of attorney go into effect only if you lose the physical or mental capacity to make financial decisions, such as after an illness or accident. 

You may want to include a requirement that a doctor first determine the incapacity before your power of attorney can be used.  On the other hand, this delay can work against you in an emergency when a decision needs to be made immediately.  We’ll explain your options and take all of this into account when preparing your power of attorney. 

      ●    Temporary Absence

If you go on vacation without your kids, you may want to set up a special power of attorney for the time you’ll be away.  Even if you don’t have kids, if you’ll be gone for a long time you may need someone to manage your finances while you’re out of the country.

      ●    Spouses and Domestic Partners

Many spouses and domestic partners decide to make their powers of attorney effective immediately.  If you’re married or in a registered domestic partnership, you probably own most of your property together.  Even so, some transactions require authorization from both of you.  Also, some of your money and property may be in your name only, so you need the power of attorney to give your spouse access those assets if there’s an emergency. 

Make sure your power of attorney is done right

With years of experience behind us, your lawyer at San Diego Law Firm will create a power of attorney that follows California law and avoids the pitfalls of generic or poorly written powers of attorney.  That way, you can be much more confident that your power of attorney will be accepted by banks, investment firms, and others. 

An alternative to “Conservatorships”

Remember that if you lose capacity in the future, by creating a power of attorney you can decide who you would like to manage your finances.  This means that in many situations, a good power of attorney can help you avoid the need for a “conservatorship” down the road.  A conservatorship would require that a loved one go to court so that a judge can appoint someone to manage your finances and healthcare.

A properly written power of attorney – along with a similar document for your medical decisions (called an “advance health care directive“) – can help minimize family conflict.  While conservatorships can be necessary for some, many times a power of attorney is appropriate and can avoid the expense and time involved with creating a conservatorship in court. 

Also keep in mind that a living trust and a guardianship can do more than you think, because both can help you plan for possible incapacity.  Don’t miss your opportunity to plan for the future.  Reach San Diego Law Firm experienced estate planning lawyers at (619) 794-0243.

Choosing someone to manage your finances

Whoever you choose to handle your finances through your power of attorney is known as your “agent.”  If this person steps in because you aren’t able to manage your finances, then you’ll depend on your agent to keep things on the right track for you.

Most people choose a family member such as a spouse or domestic partner for the job, but you might also consider naming an advisor or someone else who you can trust. 

Not only do you need to trust them personally, but also ask yourself whether you can trust their judgment because they’ll be handling your finances.  For instance, will this person be responsible and reliable enough to carry out your daily tasks?  What’s more, you may want to name a back-up agent in case your first choice is no longer available. 

How much power will you give your agent?

So exactly what does a power of attorney let your agent do?  How much (or how little) your agent can do will depend on what’s included in your power of attorney document.  It’s all up to you, but you can only make good choices if you really know and understand the options. 

You don’t want to make the mistake of using a generic power of attorney form that doesn’t capture your wishes.  We’ll make sure your authorization is accurate, complete, and really reflects what you want.  California law allows you to authorize many different types of actions in your power of attorney.  Here are a few common examples of what you may want your agent to do for you:

    ●    Sign contracts and other documents on your behalf

    ●    Manage your bank accounts

    ●    Accept your government benefits for you

    ●    File your taxes

    ●    Buy or collect insurance

    ●    Write checks to pay your mortgage, medical expenses, and other bills

    ●    Manage your property and make repairs

    ●    Buy and sell real estate

    ●    Manage your business

    ●    Take steps to minimize any estate taxes that could be due when your property is inherited

    ●    Invest your money in stocks and bonds, and oversee your existing investments

Beware of the outdated power of attorney

On her blog, Financial Planning Mastered, certified financial planner Sue Quint warns that banks and financial companies are more likely to accept your power of attorney if you update it every so often.  The bank may be more likely to question the document and deny your agent access to your accounts if it’s dated too far back. 

By reviewing your power of attorney, you’ll also have the opportunity to make changes and you may even decide to name someone else as your agent.  We’ll help you cancel your old power of attorney and get a new one in place. 

You can learn more in Part 2 of this post about how a power of attorney works.  Also get information about what you can do now to protect yourself and your loved ones by speaking with an experienced estate planning attorney at San Diego Law Firm.  Reach us at (619) 794-0243.

Currently, to qualify for Medi-cal benefits, a single person can’t have more than $2,000 in “countable” or “non-exempt” assets, and a married person whose spouse will still live at home can’t have more than $109,560 in countable assets.  Countable or non-exempt assets are generally assets that can easily be turned into cash.  Examples of countable assets include second homes, bank accounts, stocks and bonds, and assets held in your living trust.  Medi-cal rules also establish “exempt” assets that won’t be counted when deciding whether you or a loved one qualifies for benefits.  For instance, the equity in your principle home will be exempt up to $750,000 if you are single and intend to return home.  Whereas, if you’re married or have a child who is blind, disabled, or under 21 and lives in the home, then there won’t be a limit on the amount of equity exempt.  More examples of exempt property include your personal belongings, household items, certain life insurance, and one car.  Your income isn’t counted in determining if you qualify, but it can affect whether you’ll have to pay a share of the nursing home and medical costs.   You can plan to meet Medi-cal eligibility through many different methods, such as by converting countable assets to exempt assets (e.g. by paying down your mortgage or buying a new replacement car), transferring assets to your spouse or family members, or filing a petition to increase the eligibility limit so you can keep extra assets.  But no matter the strategy, the law must be carefully abided by and potential disadvantages have to be evaluated in light of your goals and circumstances.  Certain actions can bring negative tax consequences that will outweigh the possible benefits, or can lead to penalties and lengthy periods of ineligibility.

If benefits are received, then Medi-cal will attempt to collect the payments back through an “estate claim” when the beneficiary passes away by looking to the assets belonging to that person at the time of his or her death.  This includes assets that were previously exempt for eligibility purposes, but there are some exceptions.  For example if the beneficiary’s spouse was living in a home owned by the beneficiary, Medi-cal will not collect until the spouse still living in the home has also died.  Some assets can be legally transferred away during the beneficiary’s lifetime and won’t be subject to collection, but this should only be done when eligibility won’t be jeopardized.  Also note that when it comes to Medi-cal, the rules and regulations are constantly changing, creating additional planning challenges.  Just last year, in September 2008, major changes were introduced when Governor Schwarzenegger signed the Deficit Reduction Act (DRA) into law, which modified important Medi-cal eligibility rules for long term care.  It’s to be expected that more change is on the way.  On this note, a HealthAccess.org blog by Cynthia Craft reports that the Senate Health Committee recently brought experts together to discuss how to restructure the Medi-cal program if the federal government grants California a five-year waiver period starting in September 2010.  If granted, Medi-cal will be able operate outside of current Medicaid rules in order to try out new changes.  Regardless of what may happen, careful planning is essential to protecting your assets for your loved ones.  Learn more about our Medi-cal help, and when possible, prepare early while you have the most options available to safeguard your estate from the rising costs of long term medical care.  Even if you’ve already been denied Medi-cal, we can often help you reapply and correct previous mistakes.  For experienced, up-to-date help with Medi-cal planning, contact San Diego Law Firm at (619) 794-0243.

With an advance health care directive, you’ll name someone to make medical decisions for you if you’re unable to, and name a backup.  You’ll also detail your quality of life preferences by explaining what treatments you will or won’t want, stating preferences on resuscitation and life support, as well as whether you’ll want to be at your home, a hospital, or a nursing home.  Speak with your doctor to understand treatment options as you plan end of life options.  Then talk to your family and others close to you about these preferences, and give your doctor and family members copies of your advance health care directive to make sure your instructions are known and abided by.

We’ll take care to create a legally binding document that’s clear in its instructions and complies with California law, helping to minimize the risk of disagreement and uncertainty for your family.  If you have children from a prior marriage or are in a same sex relationship, an advance health care directive is even more essential to preventing conflict.  Now is the time to act if you want to carry out your wishes later. The same is true with your will and living trust.  Contact San Diego Law Firm’s experienced will and trust attorneys at (619) 794-0243 to prepare or update these important documents.