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Horizon Elder Law & Estate Planning Blog

Monday, February 22, 2021

When is it Too Late to Protect Assets for Medicaid or Public Benefits?

Affordability of long-term care is a common worry among seniors. Fortunately in California, Medicaid and public benefits are available to help cover costs. However, the rules governing public funds generally require individuals to surrender nearly all personal assets before receiving assistance. For those who have worked hard to build a financial legacy, that can be a hard pill to swallow.

When confronted with the question, “When is it too late to protect assets for Medicaid and public benefits?” California estate planning attorneys advise clients to plan ahead and plan early.

With proper legal and financial guidance, you can protect your wealth and your eligibility for long-term care benefits.

Why Do You Need to Protect Your Assets From Medicaid?

Most people are shocked by the expense of nursing home care in California. Even those with significant assets are surprised to learn how quickly their wealth will be depleted without supplemental funds.

Average California nursing home costs can easily exceed $100k per year. These costs, coupled with longer life expectancies, substantiate the cause for worry. The fear of running out of money and the prospect of watching all of your accumulated wealth evaporate on long-term care necessitate asset protection.

Do I have enough to pay for long-term care? Who steps in to help if I’m broke? Will I have any assets left over to pass on to my heirs? A qualified estate planning attorney can offer answers to your questions and guide you through the necessary steps to qualify for California Medicaid without going broke first.

How Can You Protect Your Wealth and Assets From California Medicaid?

Protecting your wealth from Medicaid is essential to preserving your financial legacy and supporting additional care expenses not covered by public aid.

If you have accumulated any wealth, even if only a family home, you should speak with a knowledgeable estate planning attorney about your asset protection options.

5 Ways to Protect Your Wealth and Assets From California Medicaid Include:

  1. Gifting assets: transferring assets to others without compensation to reduce your countable estate
  2. Irrevocable asset protection and living trusts: assigning ownership of assets to your living trust offers you access to your assets while reducing the value of your estate for Medicaid valuation purposes
  3. Life estates: transfers your residence while allowing you to reserve a life tenancy in your home until death
  4. Long-term care insurance, life insurance policies, and annuities: some long-term care costs may be covered under these policies
  5. Comprehensive estate planning

These options are best when approached at least five years before needing long-term care. Medicaid will investigate your asset and financial moves within the five years preceding Medicaid applications. Any questionable movement or reduction in assets during Medicaid’s Five-Year Look-Back Period may affect your eligibility to receive benefits.

Why Should You Consult a California Estate Planning Attorney?

You must engage in strategic yet lawful estate planning when seeking to shelter assets and wealth from Medicaid recovery. Each state has particular legal requirements and probate laws, and the varied options for transferring assets may carry other consequences for your heirs after your passing.

A thorough and comprehensive assessment of your wealth, family dynamics, and long-term care needs by a qualified estate planning attorney in your state are highly recommended. For a global approach to Medicaid asset protection and estate planning in California, contact our office today to speak with an experienced California estate planning attorney.


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