I thought I might take a minute to update you on the issue of same sex partnerships/marriages and qualification for Medi-Cal as well as the Medi-Cal recovery rules.

Eligibility
First, we need to distinguish between the Federal programs and California programs. All Federal programs are governed by Federal law, specifically the Defense of Marriage Act of 1996 (“DOMA”). That act prohibits any Federal program from recognizing same sex marriages/partnerships. So for purposes of determining Social Security benefits, SSI, SSDI, and Medicaid, same sex marriages/partnerships are disregarded.

However, these relationships are recognized for purposes of all “state only” programs, such as the:

• Dialysis Program;
• Total Parental Nutrition Program;
• Medically Indigent Adults in Long-Term Care (not linked to a Federal program);
• Minor Consent Program; and
• Breast and Cervical Cancer Treatment Program.

Due to the limited scope of these programs, the application of the California same sex marriage/partnership rules will be of little significance. However, these same rules also apply to the CalWorks program. CalWorks is a program designed to provide a safety net for families with children. If the family (which includes registered domestic partners and same sex marriages) has children or are pregnant and either 1) One or both of the parents are absent from the home, deceased or disabled, or 2) Both parents are in the home but the principal wage earner is either unemployed or working less than 100 hours per month, and the family has less than $2,000 of non-exempt assets, the family will qualify for a variety of public assistance.

Recovery
Under many circumstances when a Medi-Cal recipient passes away, their estate is subject to a claim by the Department of Health Care Services for the benefits they have received. But under the Federal law, these claims may not be recovered under a variety of circumstances including if there is a surviving spouse. Although who qualifies as a “surviving spouse” is again controlled by Federal law, it appears the DHCS is informally treating survivors of registered domestic partnerships and same sex marriages as surviving spouses and applying appropriate exemptions.

It is also noteworthy that in a recent pronouncement from the (Federal) Centers for Medicare and Medicaid Services the director stated:

A State can have a policy or rule not to pursue liens when the same-sex spouse or domestic partner of the Medicaid beneficiary continues to lawfully reside in the home.

And

The exemptions for transferring assets to a spouse cannot be directly applied to same-sex spouses or partners as a result of [Defense of Marriage Act of 1996]. . . . However, under section 1917(c)(2)(D) of the Act, a transfer of assets penalty period will not be applied if the State determines, under procedures established by the State, that denial of eligibility would create an undue hardship.

For purposes of applying this rule, the legal relationship between the deceased Medi-Cal recipient and the survivor is not limited to someone “married” as defined by Federal law.

The Law Office of Roy W. Litherland is a member of the American Academy of Estate Planning Attorneys.

I was recently asked the above question and wanted to share the answer on my blog.

First, we need some clarification. Many people receive MEDICARE, but a person’s assets and income are irrelevant for qualifying for MEDICARE. And there is no recovery for benefits received through the MEDICARE system. So if your parent(s) are only receiving MEDICARE, there are no issues or concerns.

On the other hand, MEDI-CAL is a means based program. The applicant’s financial means are examined in order to determine if they qualify.

The next thing you need to determine is if the trust in question is revocable or irrevocable. Most people create a revocable trust for estate planning purposes. This means they have the right to revoke (undo) it at any time and amend it at any time. The paragraph pertaining to this issue is usually found in the first several pages of the trust, and grants the parties creating the trust the right to amend or revoke the trust.

If the trust is revocable, the assets in the trust are considered to be owned by the persons who created the trust and are included in the asset analysis to determine if they qualify for Medi-Cal.

The rules pertaining to Medi-Cal qualification are complicated, confusing and often not readily available to the general public. But the rules are also filled with loopholes which can be used to rearrange an applicant’s assets in order to qualify. Going on the internet to find general articles about this is not likely to be of any assistance since California rules are so different from any of the other states. I highly recommend you seek qualified legal counsel who is familiar with planning in this area. The cost of getting good legal advice is likely to be an extremely good investment.

The Law Office of Roy W. Litherland is a member of the American Academy of Estate Planning Attorneys.

Life Care Planning is a Family Affair.

Whether your loved one is a parent, spouse or special needs loved one . . . whether you live with your loved one, in the next town or across the country . . . dealing with an elderly or disabled loved one can cause countless sleepless nights.

The experienced, supportive and knowledgeable attorney, geriatric care manager and support staff at the Law Offices of Roy W. Litherland realize that most people are caught up in today’s hectic pace of living and cannot spend endless hours researching answers to the questions regarding the care of an elderly or disabled loved one.

Our job at The Law Offices of Roy W. Litherland is to provide you with the answers that you need, relieve your anxiety and ultimately offer you peace of mind. We establish a relationship that assures life-long quality care for the elderly or special needs family member.

To assure the greatest success, we involve all interested family members so that they better understand where the loved one is within the range of care analysis. Although we encourage the family to be involved in the process, the senior or disabled person is the firm’s client and his or her quality of life and well-being is our paramount concern.

What is a Life Care Plan?

Life Care Planning is a process whereby the legal, healthcare, social and psychological needs of a frail elder or special needs person are assessed and a plan is developed to meet those needs in an economical fashion that protects and preserves the income and assets of the person to the greatest extent possible. The elements of a Life Care Plan include the assessment of the immediate, mid-term and long-term care needs of the person, followed by the development of a plan to provide the type of assistance the person will need during the various time frames and then determine how to most efficiently pay for that assistance.

A Life Care Plan combines in a single convenient package the elements of protecting and preserving the income and assets of the elder or disabled individual with the assessment and coordination of the care needs for the individual. Our law firm takes a team approach in developing these plans – our attorney, geriatric care coordinator and support staff consult with other legal professionals, health care professionals, financial professionals, durable medical equipment providers, insurance company personnel, employees of various government and charitable organizations, professional care providers and family members in order to determine, obtain and pay for the kind of care our clients deserve. A Life Care Plan answers all the tough questions about your loved one’s long-term care, now and in the future. It’s the ultimate protection for elders and their families.

With a Life Care Plan, the frail elder gets the right care sooner, maximum independence for as long as possible, and the ability to age with dignity. Families get help finding the right care and services; guidance with legal, health care and long-term care decisions as the elder’s condition progresses; and security for other family members. Like a traditional estate plan, a Life Care Plan includes the legal protection needed to safeguard assets, honor your loved one’s wishes and provide for family members. But it doesn’t stop there. A Life Care Plan diagrams how your loved one’s long-term care, financial, physical and psychological needs will be met. It is a roadmap for total legal care with two simple goals: (1) to maximize your loved one’s quality of life–until the end of life and (2) preserving wealth for your family’s future.

With a Life Care Plan, you never have to wonder if you’re doing everything you can for your loved one. The team at the Law Offices of Roy W. Litherland surrounds you with the resources, support, and guidance you need to make decisions with confidence. You are never alone! We have access to the resources you will need to protect your loved one’s quality of life.

Who Needs A Life Care Plan?

If you have an elderly or special needs loved one whose care you are concerned about, your family is a candidate for a Life Care Plan. Whether you have an immediate crisis or you are planning for the future of your elder or special needs person, your family will benefit from having a Life Care Plan in place. Still not sure if you need a Life Care Plan? Contact us at (408) 356-9200 or (831) 476-2400 to schedule a free, one-hour initial life care planning consultation.

The Law Office of Roy W. Litherland is a member of the American Academy of Estate Planning Attorneys.

A family came to me with a difficult Medi-Cal planning situation. Their mother had recently been advised that the mother’s aunt had died and she was about to inherit around $600,000. Normally that would not be a bad thing, however, in this case, it would be a good thing with potentially negative economic consequences.

It seems the mother was gravely ill, even though reasonably young. But due to her medical condition, she was confined to the sub-acute care unit of a skilled nursing home and the cost being incurred was about $25,000 per month.

Two years earlier an attorney had helped the mother rearrange ownership of her assets, primarily her home, in such a manner that the mother would qualify to have the Medi-Cal system pay for the cost of her sub-acute nursing home care, and upon her passing away, the home would avoid being the subject of recovery claim by the Department of Health Care Services (the “Medi-Cal” people). However, in order to continue receiving the public assistance, the mother can’t have more than $2,000 worth of assets. Thus receiving this inheritance would result in the mother exceeding the asset limit and she would loss the public benefits (Medi-Cal) with the expectation that the inheritance would then have to be totally consumed paying for the skilled nursing home care.

Upon learning about the impending inheritance, the family went back to the same attorney and asked for help, but the attorney was at a loss for any solution. The assets would be inherited and would have to be used for mother’s care.

When approached by the family, I advised them there were several things which could be done. We could apply to the probate court to cause the assets to be placed into an individual special needs trust (known as a “(d)(4)(A) trust”) or mother could inherit the assets and put them into a pooled special needs trust (known as a “(d)(4)(C) trust” or a “charitable pooled trust”). But each of these would result in the assets remaining upon the mother’s death being subject to a recovery claim by the Medi-Cal system. So I proposed implementing a strategy whereby we asked a court to amend the aunt’s trust changing the method of distribution. The probate court has the right to amend an irrevocable/non-amendable trust where it can be proven that the circumstances existing at the time the plan was created were different that those existing at the time of death, and had the aunt known about these changed circumstances, she would have caused the plan to be amended in some way to address those changed circumstances so as to achieve a more appropriate result. In this case the circumstances which changed where the mother becoming severely ill with huge medical expenses plus the fact that inheriting the money outright would result in a loss of Medi-Cal benefits. So we asked the judge to provide that instead of an outright distribution of the assets to the mother, that the assets should be placed into a “third party” special needs trust for the benefit of the mother. Held in such a trust the assets would be ignored for purposes of determining Medi-Cal benefits, and yet the funds remain available to provide the mother with whatever her needs/wants might be which are not provided for through her Medi-Cal benefits. And upon the mother’s death, the remaining assets will pass to her children.

The Law Office of Roy W. Litherland is a member of the American Academy of Estate Planning Attorneys.

Since an individual applying for Medi-Cal can’t qualify for Medi-Cal to pay for skilled nursing home care if they own non-exempt assets exceeding $2,000, many persons are tempted to simply “gift away” the excess. The “look back rule” provides that if a person makes gifts of assets within a certain period of time prior to applying for Medi-Cal and hopes thereby to qualify for Medi-Cal, they are denied Medi-Cal for some period of time based upon a mathematical formula.

The period of the look back rule as currently applied in California is 30 months, however, as soon as impending regulations go into effect (expected to be January of 2012) it will be 5 years.

There are many exceptions to the look back rules.

The Law Office of Roy W. Litherland is a member of the American Academy of Estate Planning Attorneys.

The recent health care legislation includes several provisions which are intended to amend the Medicaid law. As you know, Medicaid is the federal law which enables each state to pass its own version of public assistance and to fund the resulting programs.

The federal government made amendments to the Medicaid law in 1993 (OBRA) and 2006 (DRA) which of course included requirements to compel each state to conform. Notwithstanding, California has done little to implement either the 1993 or 2006 changes. So a serious question becomes “When will California’s Medi-Cal program implement the new health care legislation?” Answer – No one knows.

The Law Office of Roy W. Litherland is a member of the American Academy of Estate Planning Attorneys.

For those who qualify, Medi-Cal will pay for the cost of skilled nursing home care (a facility that has a licensed doctor or licensed registered nurse on staff 24 hours a day, 7 days a week). Medi-Cal will also pay for some limited in home services (services to help the person be able to stay in their home). Medi-Cal will not pay for adult day care, independent living or assisted living.

Medicare will pay all costs associated with hospice care.

The Law Office of Roy W. Litherland is a member of the American Academy of Estate Planning Attorneys.