Medicare is an excellent health insurance program for many senior residents of California. It allows them to see their doctors when needed, including some hospital stays. However, it does fall short of the mark when it comes to long-term skilled nursing provisions. This healthcare need is typically provided through the government Medicaid program. The problem for many is that the Medicaid program is asset-based, and the amount of allowable assets for qualification is very low. This means that many seniors will need to redistribute their wealth before entering a nursing facility in order to avoid asset attachment for outstanding medical bills that Medicare does not cover.
Medicaid benefit qualification
Medicaid qualification only allows an individual to have $2000 in assets if they are single. Those who are married may have $3000 between the couple. Income is also very limited as well. Exemptions are allowed, and they include one vehicle of reasonable value and a primary home. Outside of these assets, all other assets must be included in the trust to avoid financial attachment in lieu of paying the residency and treatment bills with personal finances. This typically requires a complete estate planning reevaluation for many Californians.
Medicaid Trust requirements
Medicaid trusts must all have a designated trustee who will assume ownership of all included assets. This is essentially an irrevocable financial tool, so the trust grantor will lose all control of the assets beyond this point unless there is a private contract with the new owner and trustee for certain types of asset control as stated in a new estate plan.
The need for having a Medicaid Trust can create a tenuous situation for many individuals due to the control issue. Spouses cannot be named as trustees either. However, certain issues such as allowing a spouse to remain in a home that is included in the trust can be arranged as a stipulation.