medi-cal asset protection trusts

IRREVOCABLE ASSET PROTECTION TRUSTS

Our Elder Law Attorney, Joseph McHugh, and his team specialize in the creation of a California Irrevocable Medi-CAL Asset Protection Trust are designed to hold assets, including the residence (especially if there is additional real estate) and liquid assets (bank accounts or investment accounts). There are many reasons why California seniors should consider an irrevocable trust to protect their home and assets:

  • Protection from Personal Injury Lawsuits (generally car accident related).
  • Protection from “Undue Influence” of others getting seniors to sell or give away the house for a lower value. The MAPT has a trusted person that would have a legal responsibility to manage the house and assets for the senior’s needs.

 

Only Seek Counsel From An Experienced Elder Law Attorney

Do not believe everything you hear about Medi-CAL or Spend Downs from Social Workers, Financial Planners, and CPAs, or try to file a Medi-CAL application on your own, until you have a consultation with an experienced Medi-Cal professional. You will be amazed at what strategies are legally available to you for Medi-CAL Qualifications.

Assets held in a Revocable Living Trust will avoid Probate and Medi-CAL Recovery… But this type of trust cannot be used as asset protection against lawsuits.

Asset Protection Planning using the Irrevocable Trust should be a critical part of estate planning for all families concerned about protecting real estate and liquid assets from lawsuits and Medi-CAL Estate Recovery.

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Asset Protection for Seniors Driving Cars

Joseph McHugh, as an Asset Protection Elder Law Attorney, highly recommends advanced planning using the Irrevocable Medi-CAL Asset Protection Trust in cases where seniors are healthy and still driving… it is important to protect major assets from lawsuits due the car accidents. Or preventing the possibility of a senior getting coerced into signing away assets by mistake as they get older and have less mental capacity. Our attorney makes sure a responsible trusted family member is established as trustee of this Irrevocable Asset Protection Trust. If properly created in advance (before a Cause of Action – Accident- has occurred) most creditor issues may be avoided. This also will protect assets if they need nursing home care in the future.

We have had elder clients get into car accidents and luckily, they had put most of their assets into the Irrevocable Trust so the only claim from a lawsuit was what car insurance provided and a small amount in their personal checking accounts.
 

Qualifying For California Medi-Cal…Asset Limits Are Changing!

Effective January of 2024 California will have a NO Asset Limit and only an income limitation.

In 2023, the countable monthly income must be at or below $1,677 (for an individual) or $2,267 (for a married couple)…Countable monthly income is determined by taking your gross monthly and deducting health insurance premiums. If you have a higher income, you may qualify with a “share of cost” (deductible).

NOTE: Asset limits for SSI still remain at:

  • Single: $2,000
  • Couple: $3,000
  • To keep SSI Benefits when expecting an inheritance or a lawsuit settlement, we can help with a Special Needs Trust (if you are under 65 years old) and have this money go directly into this trust.

 

irrevocable medi-cal asset protection trust

How The Irrevocable Trust Can Save Assets For Your Family:

Basically, there are three (3) ways to pay for Long Term Care in Skilled Nursing Homes:

  1. Pay the Nursing Home costs through long term care insurance (if you are insurable and it is affordable)
  2. Pay Nursing Home costs from your retirement savings (decreasing the amount of the estate your well spouse will have to live on and what your children might inherit)
  3. Get help paying for Nursing Home costs, apply for and qualify for Medi-CAL Long Term Care (saving your estate and giving you and your family peace of mind). This is what our elder law attorneys and staff can help you with!

LA LAW Elder Law Attorney, Joseph McHugh and his team will help your family with Pre-Crisis Medi-CAL Planning or Medi-CAL Crisis Planning (in Nursing Home and has 100 days of Medicare to pay Nursing Home costs). WE CAN FILE THE MEDI-CAL APPLICATION FOR YOU!

 

What is an Irrevocable Trust?

There are big differences between a Revocable Trust and an Irrevocable Trust. Basically, the main difference is that a Revocable Trust does not remove assets from your name (Social Security number) and your direct control, therefore these assets will be counted as assets you own and can be used for Medi-CAL eligibility, Medi-CAL Estate Recovery or for a court ordered judgement.

This means:

  • In a Revocable Trust or “Living Trust”, Medi-CAL and/or other Creditors CAN count or take assets as they are YOUR ASSETS! A lien can be placed on a home or bank accounts owned by a Revocable Trust for your debts.
  • A lien cannot be placed on a home or bank accounts owned by an Irrevocable Revocable Trust for your debts or cause of action made after the asset transfers into the Irrevocable Trust.

 

Who Should Consider A Medi-CAL Asset Protection Irrevocable Trust?

medi-cal asset protection trustIrrevocable Medi-CAL Asset Protection Trusts should be established by older adults (or persons facing the need for long term care) who wish to protect their assets (including the family home). Generally, anyone that is considering this type of preplanning needs to have a sense of emotional security, because he or she must be ready to relinquish direct control over his or her assets. Also, if a senior is still driving, it is a good idea to protect the house and other savings from a personal injury lawsuit if the senior causes a car accident!

The control of these assets is turned over to a loved and trusted family member, who acts as trustee of an Irrevocable Trust. The trustee is in charge of guarding and distributing the assets in the Irrevocable Trust. Meanwhile, the person needing long term care continues to have direct control over his or her income, such as social security and pensions, as well as any assets chosen to remain outside the Irrevocable Trust.

Irrevocable Trusts have the additional benefit of passing assets to heirs (beneficiaries) without requiring a probate. If needed, the Irrevocable Trust can set incorporate special purpose estate planning, such as Special Needs Trusts for heirs that are on SSI or other government programs; or Discretionary Trusts (Spend Thrift Trusts) for heirs that cannot properly manage their financial affairs.
 

What Are The Steps For Creating Irrevocable Trusts?

Your Irrevocable Trust must have a customized plan suited to your family’s needs and personal objectives. You will be asked a series of questions to determine how the Irrevocable Trust should be drafted to ensure it gives you maximum protection. Some of the questions will be:

  • Do you need income from the assets after they are placed in the Irrevocable Trust?
  • What asset controls do you want to retain? Understanding that all assets in the Irrevocable Trust cannot be controlled by you.
  • Will you appoint a trusted independent third party to have specific authorities to adapt the trust to unforeseen circumstances, such as future changes in the law?
  • Do you need to draft any special needs protections for your heirs (beneficiaries of the trust) who are disabled or who may have creditor issues or who may be involved in a divorce?
  • Who are the beneficiaries upon your death?

After you have defined the purposes for the Irrevocable Asset Protection Trust, then your assets need to be IDENTIFIED. We will guide you or your trustee on the appropriate amount of assets to be placed in the Irrevocable Trust.
 


 
After a thorough review of the best strategies for your family situation and our fees for the scope of work, we will structure a comprehensive legal plan created specifically to give you (or your loved one) the best care possible, while protecting your family assets.
 
Our Law Firm is centrally located in Burbank (Southern California); however, our Elder Law Lawyer, Joe McHugh and his wife Kathy McHugh, Triage Director serve many clients throughout the state. They can create required documents and guide families through the entire process via, phone, email and FEDX.

We are very proud of the many personal and professional referrals we receive from happy clients and colleagues.
 
Call us for a free 30 minute initial consultation for our legal services at: (818) 241-4238. Or you can submit this form to request this free 30 minute consultation to determine if our services meet your needs.