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.
