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How can I structure my estate plan to potentially qualify for Medi-Cal benefits while preserving my assets for my heirs?

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So, Medi-Cal in California is changing the rules for Medi-Cal eligibility. It used to be that you could not have more than two thousand dollars of non-exempt assets. You can have an unlimited amount of exempt assets like a home, a car, a 401K paying distributions, a small life insurance policy, a burial plot, personal property—those are all exempt. But things that are not exempt include anything else, like a second car, money in the bank, or even an expensive musical instrument. Medi-Cal used to say in California that you can only have two thousand dollars of non-exempt assets. Qualifying, the rule now is you can have a hundred and thirty thousand dollars. The rule in the future will be very different. How do you make sure that you can qualify with changing rules and changing circumstances? The most important thing is that you have to have the correct legal documents to allow your family members to change the nature of your assets. They have to be able to change non-exempt assets into exempt. They have to be able to give money away if that’s appropriate. They have to be able to spend money in certain areas. The most important thing for Medi-Cal planning is to be able to financially qualify and avoid Medi-Cal recovery in the future, which is basically repaying Medi-Cal for the loan they gave you when they paid your medical bills. We have to have the authority to do that with changing environments and changing rules. The most important thing is to give your family flexibility, but most importantly, give them authority. So, we need to have the legal documents in place that will allow your family members to qualify you and avoid a recovery action later. That’s the most important thing now, especially since things are changing so quickly in California.

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Milpitas, CA estates & probate attorney Elijah Keyes discusses how to structure your estate plan to potentially qualify for Medi-Cal benefits while preserving your assets for your heirs. In California, changes to the rules governing Medi-Cal eligibility are significant. Historically, Medi-Cal eligibility stipulated that individuals could not possess more than two thousand dollars in non-exempt assets. Exempt assets, on the other hand, could be held without limit and included items such as primary residences, vehicles, 401(k)s with ongoing distributions, modest life insurance policies, burial plots, and personal property. Conversely, non-exempt assets encompassed anything outside these exempt categories, including additional vehicles, bank savings, and even high-value musical instruments.

Previously, California enforced a strict limit of two thousand dollars in non-exempt assets for Medi-Cal eligibility. However, the current regulation permits applicants to possess up to one hundred and thirty thousand dollars in non-exempt assets. It is crucial to recognize that these rules are subject to change in the future.

In navigating these shifting eligibility criteria, the most critical aspect is ensuring that individuals possess the appropriate legal documents to grant their family members the authority to manage their assets effectively. This authority is vital for converting non-exempt assets into exempt ones, facilitating the transfer of funds if necessary, and allowing appropriate expenditures. For effective Medi-Cal planning, the ability to achieve financial qualification while preemptively avoiding potential medical recovery actions, which involve repaying Medi-Cal for healthcare expenses, is paramount.

Given the rapidly changing landscape in California, the utmost priority lies in granting family members the flexibility and authority they need to navigate evolving circumstances effectively. This entails having the requisite legal documents in place to ensure eligibility and mitigate the risk of future recovery actions.

Other Estate Planning and Probate Topics Attorney in Milpitas, California

How can I structure my estate plan to potentially qualify for Medi-Cal benefits while preserving my assets for my heirs?

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