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Horizon Elder Law & Estate Planning Blog

Thursday, May 5, 2022

How a Special Needs Guardianship Protects Against Medicaid Issues

Many parents who have children with special needs are shocked when they discover that a parent can no longer manage the medical care, education, or financial matters of their child when the child turns 18. Also, you will not have the legal authority to access your child’s educational or medical records. You have limited legal options for handling the situation to protect your child.

A California estate planning attorney can answer your questions about how a special needs guardianship protects against Medicaid issues.

An Overview of Special Needs Guardianships

A guardianship of your child with special needs involves asking the court to appoint someone who will have the legal authority to make decisions on behalf of the person with disabilities. Not every person with special needs requires a guardianship, because many people with special needs are capable of making their own decisions and handling their financial, medical, and educational matters.

On the other hand, if a person with special needs does not have the capacity to manage those issues, they might inadvertently mismanage their financial matters and lose eligibility for Medicaid benefits. Many people with disabilities rely on Medicaid for their healthcare services. Also, qualifying for Medicaid can make a person eligible for many other benefits programs that help the disabled individual pay for housing, transportation, utilities, food, and other basic necessities.

To become and remain eligible for Medicaid in California in 2022, a disabled person must meet all of these requirements:

  • Be a resident of the state of California, a U.S. national, citizen, permanent resident, or legal alien,
  • Need healthcare or insurance assistance, and
  • Meet the low-income requirements.

For example, the maximum household income limit for a single person living alone in 2022 is $18,075. A household of two people will have a combined income limit of $24,353.

Special Needs Guardianships Versus Special Needs Trusts

Special needs trusts help prevent a person with a disability from getting kicked out of Medicaid by an inheritance, personal injury settlement, or acquiring an asset that exceeds the Medicaid asset limit. The asset would go directly to the special needs trust rather to the individual.

The asset limit for Medicaid eligibility for many years was a paltry $2,000 in countable assets for an individual, and $3,000 for a couple. California is eliminating the asset limit for Medi-Cal. On July 1, 2022, older and disabled Californians with countable assets up to $130,000 for an individual and $65,000 for each additional family member, can qualify for Medi-Cal as long as they meet the other criteria for the program. By January 1, 2024, our state will no longer have an asset limit at all.

In the past, a person who needed long-term care would have to become impoverished before Medicaid would help pay for their long-term care. With the elimination of the asset test, that will no longer be the case.

Still, special needs guardianships can provide protection for people receiving Medicaid benefits by giving someone else the legal authority to act on behalf of the person with a disability to manage the required Medicaid administrative requirements and paperwork to become and remain eligible for this valuable program.

A California estate planning attorney could seek a special needs guardianship for your loved one with a disability. Contact our office today for legal assistance, we offer a free consultation.


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