A Medi-Cal trust can be used if you want to qualify for Medi-Cal to pay for long-term care. Before we get to the question of control, we should explain why Medi-Cal coverage could be relevant to you during the latter portion of your life.
We are all aware of the fact that some seniors require living assistance. When you are healthy, you may assume that it is unlikely that you will ever be one of them. As a result, you may not care too much about long-term care and the expenses that go along with it.
In reality, the vast majority of senior citizens will need help with their activities of daily living eventually. The figure is 70 percent according to the United States Department of Health and Human Services.
Medicare does not pay for custodial care. It will pay for up to 100 days of convalescent care, but it will not pay for ongoing living assistance. Since long-term care is very expensive, this gap in coverage is considerable.
Medi-Cal is a jointly run federal/state government health insurance that will pay for long-term care. It is a program that is available to people who can prove that they have financial need. The asset limit is just $2,000 for an individual, though some things that you own do not count.
If you retired with a reasonable store of resources, and you want to qualify for Medi-Cal, you have to get assets out of your own name. This is not as bad as it may sound, because you could essentially give your children their inheritances in advance.
You could give direct gifts, but you have to complete the gift giving at least 30 months before you apply for Medi-Cal, or your application will initially be denied.
An alternative would be to convey assets into a Medi-Cal trust. This type of trust would be an irrevocable trust.
Assets that have been conveyed into the Medi-Cal trust would not be counted by the Medi-Cal program when your eligibility was being determnied, because you are surrendering incidents of ownership. You cannot revoke the trust and take back the assets, so the trust owns the assets.
So the answer to the question that serves as the title of this post is no, you do not maintain control of assets that you convey into a Medi-Cal trust.
However, you could create an income-only Medi-Cal trust. With this type of trust, you would not control the principal, but you could receive distributions from the earnings of the trust.
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We can be of assistance if you would like to learn more about Medi-Cal trusts. Our firm offers free consultations, and you can send us a message through this page to set up an appointment: San Jose CA Elder Care Attorney.