Preserving the Residence from Recovery by Medi-Cal

Preserving the Residence from Recovery by Medi-Cal

Protecting the family residence from recovery by Medi-Cal is a necessary ingredient of proper planning for the Medi-Cal patient’s family. We are referring to the procedure of preserving the principal residence of your ill spouse or parent following their death.

Normally, recovery will take place at death against assets of an unmarried Medi-Cal recipient, or after the death of the last to die of a married couple, at least one of whom has received Medi-Cal benefits. However, such recovery against the family residence can be avoided in California since it is the one state in the country that prevents transfers of the residence from penalizing, or disqualifying, transferors who are Medi-Cal qualified. The logic is as follows: since a principal residence is exempt under Medicaid laws, its transfer by a Medi-Cal recipient could not be for the purpose of qualifying for Medi-Cal, and therefore carries no penalty.

The intention of transferor to live in the residence (or to return to live there) is the only prerequisite to establishing the necessary ingredient of the home being a principal residence as defined under Medi-Cal rules.

There are a number of ways to prove this intent. At the Bethel Law Corporation we take pride in proving such by the use of specially drafted Financial Power of Attorneys or Living Trust documents. These documents have special Medi-Cal powers to preserve the privacy of the family in arranging the ill parent or spouse’s assets is such a way as to avoid any unnecessary spend-down on long term care. It is important these powers be apart of your estate planning package so that if the Medi-Cal issue arrives, you and or your family are protected and your principal residence is protected. Please give us a call for further information on how to protect the residence from Medi-Cal spend-down and recovery.

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