Your Important Questions Answered

We understand you have a lot of questions concerning elder law and Medi-Cal planning. We hope you'll find the following information helpful and encourage you to contact us should you have additional questions.

Proposed Recovery Regulations

The following was updated on February 23, 2017. Federal legislation will have a significant effect on Medi-Cal (i.e., Medicaid) planning as described in this website, when the legislation is made effective in California.

Status of New Legislation

The United States Congress passed the Deficit Reduction Act of 2005 (S. 1932) (hereinafter the "ACT" or the "DRA") that was signed into law by President Bush on February 8, 2006.

No. With proper planning, you will not need to spend everything in order to become eligible for Medi-Cal. You can still do the planning even if you are in immediate need of Medi-Cal benefits. For one thing, there are certain exempt/non-countable assets that will not affect your eligibility for Medi-Cal, such as your home, if you state an intent to return home on your Medi-Cal application. But there are also steps that you can take to save your non-exempt/countable assets. For example, you can transfer assets out of your name under certain Medi-Cal approved conditions or convert countable assets into non-countable assets, such as using the cash to pay your home mortgage or repair your home. Make sure you consult with an elder law attorney to come up with the best plan for you. You may be disqualified from Medi-Cal if you do not do it properly. 

You will become ineligible for Medi-Cal benefits if you give your daughter the money during the 30-month period preceding the date of your application. California currently follows a 30 month "look-back" period. This means that when determining your eligibility for Medi-Cal, any gifts that you made before the 30-month period preceding the date of your application will not be considered. However, any gifts of non-exempt assets that you made during the 30-month period preceding the date of your application will be considered. Gift transfers of non-exempt assets create a period of ineligibility that is determined by dividing the value of the gift by the average private pay rate for nursing home care in California, as published by the California Department of Health Services. The average private pay rate (APPR) for 2023 is $11,576. In order to determine your period of ineligibility you would divide $60,000 by $11,576. This gives you 5.18 that is rounded down under current law to 5 – the number of months that you would be ineligible if you gave your daughter a gift of $60,000. You should consult with an elder law attorney because there are certain laws specific to the state of California that can be used to make transfers and avoid any ineligibility. California's implementation of the federal Deficit Reduction Act (DRA) will significantly change this example, because the DRA will have a 60-month look-back period, and the period of ineligibility will begin when you apply for Medi-Cal, with no rounding down in the number of months of ineligibility.

No, but the state may be able to file an estate recovery claim, for benefits paid on your behalf, against your interest in the home. If done properly, you can avoid the estate recovery claim by avoiding a probate of your estate when you die.

Will I lose my Medi-Cal benefits if I inherit money or property?

Yes, unless you take action immediately. Any money or property that you inherit will become a non-exempt asset on the first day of the following month. This inheritance will disqualify you from Medi-Cal unless you transfer it out of your name. You can do this if you have legal capacity. If you do not have legal capacity but have a durable power of attorney with gifting authority, your agent/attorney-in-fact can transfer this asset out of your name. Either way, you should consult an elder law attorney to make sure that you/your agent is complying with Medi-Cal rules.

Now is the best time. It is never too early to start planning for Medi-Cal. You can always create a durable power of attorney and advance health care directive that gives someone else the authority to manage your estate and make health care decisions for you when you become incapacitated. This early planning, which will take effect on your incapacity, will avoid the need of getting a court order through a conservatorship or a proceeding to authorize a transaction involving an incompetent spouse (Probate Code Section 3101 et seq.). Click here to see Probate Code Section 3101.

What can I do to transfer her assets out of her name before she dies?

You should first obtain a competency opinion from a doctor. The doctor may find that your mother has the legal capacity to sign transfer documents. If the doctor determines that she does not have legal capacity, you will have to petition the probate court to appoint a conservator for your mother's estate. Either way, you should consult with an elder law attorney. California law provides procedures where documents can be executed by your mother even if she is too disabled to write her name so long as she still has legal capacity.

…the power to transfer assets out of my name if I lose legal capacity while I'm on Medi-Cal. How do I figure out if my durable power of attorney gives her this power?

Look for a section that mentions "gifts." California law requires a power of attorney to contain specific authority to allow the agent/attorney-in-fact to make gifts before a gift can be made by the agent. Some powers of attorney have limited gifting authority that is inadequate for Medi-Cal planning. You should consult with an elder law attorney to make sure that your durable power of attorney provides the adequate gifting authority.

If your spouse lacks legal capacity to sign agreements or deeds, you should file a petition with the probate court, under Probate Code § 3101 et seq. ( Click here to see Probate Code Section 3101), for a proceeding to authorize a transaction involving an incompetent spouse, to give you the power to transfer your spouse's assets out of his/her name. This is done in order to meet Medi-Cal requirements. You should also plan to avoid a probate when you die and have your own estate plan that if you die before your spouse does, your Meci-Cal recipient spouse should not inherit your assets when you die, which may disqualify him/her from Medi-Cal for a period of time and force a "spend-down" of the inherited assets to pay for his/her long term care.

If you live at home, you get to keep all of the income that you receive solely in your name. However, if you receive less than $3,715.50/month (for 2023), you also get to keep the amount of your spouse's income that it takes to raise your income to $3,715.50/month. This is referred as the Minimum Monthly Maintenance Needs Allowance (or MMMNA). If your income, combined with your spouse's income, is less than $3,715.50/month, you may be able to use income from your non-exempt assets in order to make up the difference. This expansion of the Community Spouse Resource Allowance (CSRA) beyond $148,620(for 2023) requires obtaining approval from the court or at a "fair hearing." The Department of Care Health Services will increase the CSRA, MMMNA, and APPR at the beginning of each year, based on inflation.

The worst thing you can do is assume what you can or cannot do or assume that Medi-Cal will not be available to you, without first consulting with an elder law attorney. This area of law is obscure, confusing and often irrational. Many attorneys who do no practice elder law are not able to give you competent advice. Don't lose the family home and savings to a nursing home due to poor advice or planning.

Within 90 days of the date of death of an individual who received or may have received Medi-Cal benefits, or was the surviving spouse of a person who received health care Medi-Cal benefits, the attorney for the estate, or if there is no attorney, the beneficiary, the personal representative, or the person in possession of property of the decedent, must give written notice by mail of the decedent's death to the Director of the Department of Health Services (DHS) at his or her Sacramento office, or, Estate Recovery Unit, Mail Stop 4720, P.O. Box 997425, Sacramento, CA 95899-7425 of the decedent's death. The notice must include a copy of the decedent's death certificate (which does not need to be a certified copy). The notice should be sent by certified mail, return receipt requested, to document the receipt of this notice. A notice to the county welfare department or the Social Security Administration or a notice to DHS without a copy of the death certificated will not satisfy this requirement. The DHS will then send the one who sent the notice a questionnaire that should not be returned to the DHS without consulting with an elder law attorney for assistance and advice in completing the questionnaire.

Note: The following is based on current California law. However, the state of California is considering passing laws and regulations that will eliminate or restrict some of the planning options described below. On March 25, 2005, the state of California adopted "emergency regulations" to make estate recovery claims on annuities purchased on or after September 1, 2004 and on life estates, and to increase the state's ability to recover Medi-Cal benefits upon the death of a Medi-Cal beneficiary. On April 25, 2005, in response to a lawsuit filed, the state of California withdrew these regulations that were passed on an "emergency basis" and will proceed to adopt these or similar regulations though the normal public-hearing process. You can view those withdrawn regulations through the following link.

Call Daniel R. Kisner, Esq. at(510) 791-5790 for a phone consultation or an appointment for a meeting.