Elder Law Attorney: What is Medi-Cal Spend Down for Long Term Care?

First off, don’t be confused about the programs. We have Medicare, Medicaid, and Medi-Cal. Medicare is a federal program that serves individuals who are citizens and age 65 or older. Medicaid is a federal program administered through the states, so each state can make some of their own rules. In California, Medicaid goes by the name Medi-Cal, and that leads to some confusion.

Medi-Cal serves people of all ages if they qualify, but the focus of this article is on using Medi-Cal to pay for the long term care needs of seniors.

Two types of care are available through Medi-Cal. One type is In Home Supportive Services, also known as IHSS. This is available for qualified people over 65 years of age, or people who are disabled or blind. IHSS is provided to qualified people to assist in paying for services to enable them to stay at home. This is an alternative to out-of-home care such as nursing homes or board and care homes. If a person is approved for Medi-Cal, the county then evaluates the person to see how much care is needed to keep them at home. This is usually a certain number of hours of assistance that will be provided by Medi-Cal each day.

The other Medi-Cal program that is frequently used by seniors is the program that pays for long term care in a skilled nursing facility. Nursing home costs in our area run about $11,500 per month, so having this cost covered by Medi-Cal can provide a tremendous benefit to seniors and their families.

If a person enters a nursing home as a resident, the average length of stay, nationally, is 30 months. Many people think that Medicare will cover the nursing home expense, but that’s not true. Medicare will cover a stay of up to 100 days, but in most cases the Medicare coverage ends well before the 100 days are up. When Medicare coverage ends, the family must use their private funds or rely on Medi-Cal to pay for the senior’s care.

If the senior stays at the nursing facility for an extended period, the senior typically is on Medi-Cal, but only after they have depleted their assets. People refer to this depletion of assets as “spend down” or “spending down the senior’s assets.” Although this method is frequently used in other states, or the family uses this method through lack of knowledge about alternatives, this method is NOT used in California by knowledgeable elder law attorneys who are trying to preserve the senior’s assets. California law permits us to use other methods which result in preserving the assets of the senior.

I have had people say to me, “we spent over $500,000 of my mother’s assets before someone told us to go see a good elder law attorney.” Or, they say something like, “we’ve been paying for Dad’s nursing home costs for five years now, and he’s almost out of money.”

Don’t let this happen to your family. California Medi-Cal laws allow for advance planning to preserve the assets for the benefit of the senior, a spouse, and other heirs. Even if you don’t need Medi-Cal planning for yourself or a loved one now, make sure that you have the proper legal documents in place so that the right decisions can be made in the future. Don’t let the terms of a poorly drafted power of attorney or trust document prohibit your agent or trustee from taking the actions that you would have wanted them to take to preserve your assets for your family or your preferred charity.



Estate Planning Attorney: How Will You Pay for Nursing Home Costs?

If you’re eligible for Social Security, you probably know it. If you’re eligible for Medicare, you probably know it. But what about Medi-Cal? How will you pay for the costs of nursing home expenses? Could you be eligible to have Medi-Cal pay those costs? Have you planned ahead to protect your family’s assets?

One of the greatest failures I see as an Elder Law Attorney and Medi-Cal Planning Attorney is the general lack of awareness of what can be done with proper planning. I have had more than one family tell me the sad story that, “we paid over $500,000 for our mother’s nursing home costs before someone told us to go see an elder law attorney.” Wow! That’s a lot of after-tax money that the family didn’t have to spend.

Why does this continue to happen over and over again? People simply don’t know that planning techniques are available if you work with a knowledgeable elder law attorney. A Federal law approved in 2005 changed the eligibility rules, but California hasn’t adopted the new law yet. Yes, the other 49 states have the new rules, but not California. Our rules regarding Medi-Cal eligibility for covering nursing home costs are very different from the other states.

The average length of stay in a nursing home, nationally, is 30 months. If you go to a nursing home, that’s the average length of stay. That’s 2.5 years. In Santa Clara County, the cost of staying in a nursing home is between $11,000 and $12,000 each month. Can you afford that? How will it affect your spouse and family?

I’ve had people tell me that it doesn’t make sense to plan because the people who go to nursing homes die within two months. Really? That’s not true at all. Talk to people who have had a loved one there. Some people are residents in a skilled nursing home for 2 years, 5 years, 10 years, and even longer. The management at one nursing home told me that one resident had been there for over 20 years!

70% of individuals are impoverished within one year of entering the nursing home. 50% of all couples are impoverished within one year of one spouse entering the nursing home. It’s expensive, but that’s the reality of the situation. What can be done to protect your assets and establish some level financial security for the ill person, their spouse, or their family?

Federal law permits Medi-Cal planning, and people who plan ahead can protect their assets for their families. What about the families who think that the parents’ home will go to the kids when both parents die, but then they later find out that the home must be sold to satisfy the deceased person’s debt to the State of California? This happens because people don’t understand the laws and the complicated Medi-Cal rules. Why does this happen? Two reasons: (1) Lack of knowledge as to what can be done to protect the family’s assets, and (2) not having the proper legal documents put in place by a knowledgeable Elder Law Attorney who specializes in the financial side of Medi-Cal Planning and Eligibility for clients.

Lack of proper planning can cost a family hundreds of thousands of dollars. Do-it-yourself options and getting advice from someone other than a qualified elder law attorney can produce devastating results. Unknowledgeable people frequently quote the law from other states, but remember that California law is different from all of the other states.

If you want to protect the elder’s assets, talk with a qualified Elder Law Attorney. I regularly see a lack of planning or planning that won’t work because it wasn’t done right. Don’t let that happen to your family.




Guess What? I’m Getting Married! Gilroy Estate Planning Attorney

My client told me that her 91 year old sister had never been married and never even had a boyfriend, but she met a nice 88 year old gentleman and now she was getting married to him after knowing him for a very short period of time. True love? Scam?

We frequently hear of someone convincing an elder to change their will or trust for the other person’s benefit, or even using what the law describes as undue influence, but what about a marriage? There have been a couple of high profile cases of this in our area in the last few years — both involved men who had declining mental capacity and the court later determined that they had been taken advantage of by women who married them for their assets.

In one case, the stepdaughter divorced her husband and began wearing her deceased mother’s clothing and perfume to convince her stepfather that she was his loving wife who had returned from the grave. The stepdaughter then took him to Reno and married him! When the details came to light following the man’s death, the court determined that the man perhaps thought he was remarrying his wife who had already died, but he certainly didn’t know that he was marrying his stepdaughter.

The other case involved a man from Norway who lived in San Jose and had no wife or children, but he had $2 million and he was leaving it all to his relatives in Norway. When he died and the family went searching for his estate, it turned out that his estate planning attorney had married him and she was claiming that all of the money had been left to her! He had gone to her for help and she was now claiming that as his wife, everything was hers. However, they had never told anyone about the marriage and they had never lived together, so the court determined that the gentleman wasn’t even aware that he got married. It was the court’s opinion that the man had been scammed and the court directed that his assets were to go to his heirs in Norway. The attorney appealed and continued to claim that she was his legitimate wife, but she lost again on appeal and the heirs in Norway eventually received their rightful inheritance.

These are interesting stories that actually happened in our area.

Marrying for money is a growing scam and it’s a form of elder abuse that is spreading rapidly. Is it abuse, or is it love? Sometimes it’s true love, and sometimes it’s not. How do you tell? There is no federal law on marriage as a form of elder abuse, and state laws vary from state to state. The mental capacity required for marriage is extremely low, so how do you prevent an elder from being scammed? It’s difficult. If the elder is isolated and not in regular contact with family and friends, people other than the scammer aren’t aware of what’s happening. That’s the problem. It’s hard to correct when many months or years have already passed since the marriage occurred.

Talk to your parents and loved ones if you’re concerned. Find out if they are financially “assisting” someone else or if a new “friend” has suddenly entered their life. You should also look for signs of stress or loneliness, especially after the death of a loved one.

We often use special irrevocable Medi-Cal trusts to protect an elder’s assets in the event that they need to go to a nursing home, but these irrevocable trusts have the added advantage of moving the assets beyond the reach of the elder. This generally prevents most of the elder abuse that occurs in situations when the elder is coerced into making changes in the distribution of their assets.

Call our office if we can assist you or a loved one create an estate plan to better protect assets from elder abuse.

The Underbelly of Assisted Living with a Gilroy Elder Law Attorney

First, a disclaimer and a note: I have many clients who are happy in assisted living, and many of the assisted living facilities in our area are fantastic and wonderful and ethical. I am not passing judgement upon any particular facility, but just suggesting that people approach the issue with more knowledge and their eyes open.

Point One – How do you find a good assisted living facility for yourself or your parent? Unfortunately, the need sometimes arises with little warning, and the family hasn’t had the opportunity to look around and check out the different facilities and evaluate them.

Alas, the angels are here to help. Really? . . . My client had to be moved in a rush, and his son was in charge of finding a facility for him. The son advised me that he had been referred to a social worker who was helping him to find the “best” facility for his father at no charge to the family for the social worker’s time and service. Really? I asked who the social worker worked for and I suggested that the son find out how the “social worker” gets compensated.

The son called me the following day in total dismay. He asked the questions I told him to ask, and he found out that the very polite “social worker” was not a social worker at all, but an independent agent who gets paid a commission to place seniors at assisted living facilities. These people essentially act like real estate agents who handle rental properties for a commission, but they are not regulated and they are not licensed by the Department of Real Estate.

How does the family know that the suggested facility is really the right fit for mom or dad, or it’s just the one that pays the agent the highest commission? In most cases, you’ll never know. You need to check out the facilities and develop your own opinion.

Point Two – What is bait and switch? Most of us have an idea of how this works, and many of us have been harmed by this sales tactic before, but has an assisted living facility ever done this? Could such nice facilities, which purport to love elders, really use this tactic to increase their profits? Remember, these facilities are “for profit” ventures.

Clients have told me of placing their parent in an assisted living facility at $4,000 a month after the senior was evaluated by the facility, and then suddenly the charge was bumped to $6,000 and then $8,000 a month because the elder “needed a lot more care than was apparent at the initial evaluation.” Wow…… Really? How could this happen?

You have to ask yourself, is this real? Why didn’t they tell us this in advance? Mom seems the same to us as she was a year ago.

Once an elder is relocated to an assisted living facility, the family is reluctant to move them again. Sometimes the elder had difficulty in adjusting and they don’t want the elder to have to go through that process all over again. The facilities know this too and warn families against moving the elder. The result is that the facility gets more money from the family if the elder isn’t moved.

What Can You Do? – The elder and their family members need to be aware of how things work and be better informed consumers. Follow the money and understand the incentives that people have when they’re giving you advice.





Are You Married? Separated? Gilroy Estate Planning Attorney

I sometimes come across very interesting marital issues. I don’t practice family law, but sometimes discussing the estate planning issues can turn up new questions.

One client needed to do some urgent Medi-Cal planning to protect his properties. He had ended his second marriage 7 or 10 years earlier and they had a list of the properties that belonged to him, but something troubled me about the situation so I asked the family to check with the county to see if their father was legally divorced. Lo and behold, unbeknownst to everyone involved, the man and his second wife were still married because the paralegal they had used for their divorce had never filed the final papers with the court. As if that wasn’t bad enough, the court then required that they start the divorce process all over again from the beginning since so much time had lapsed since they had originally divided their properties.

And what about thinking you’re married, but you’re not? A recent client told me that she had been married for 34 years, but no…. We don’t have common law marriage in California, so they weren’t legally married. Her husband had intended to disinherit his children whom he hadn’t seen in decades, and now her husband was grievously ill in the hospital without the proper estate planning documents. If he had died then, none of his property would have gone to the woman he thought was his legal wife. If he would have died without the proper paperwork expressing his wishes, everything he had, including half of the house, would have gone to the children he intended to disinherit, and his “wife” of 34 years would have been left out in the cold.

And what about separation? A client told me that she was separated, but it wasn’t a legal separation. She signed a document allowing her husband to take all of his retirement money without giving any of it to her, and he did just that! He traveled the world and had fun, and she assumed that because she managed and maintained the rental properties they owned together, that those properties would be for her. Not so. Several years later, after spending all of his retirement funds, the husband was back and asking for his half of all the rental properties which had now increased substantially in value.

Perhaps I shouldn’t be so amazed that these things happen as often as they do, but I’m still continuously amazed.

What if you’re definitely married, but it’s a second or third marriage? Sometimes the couple is very clear on what happens to their assets when the first one dies, and then when the second one dies, but sometimes they haven’t really thought it through, or they’ve given it some thought, but they each have a very different idea of what should happen. And despite age and health issues, there is little certainty regarding the order of death, so you need to plan for both possible outcomes. I have seen families plan for a very ill father to die, and then the mother dies first. Be prepared for either outcome.

Whether you think you’re married or separated or divorced, you should know your correct legal status and you should also know how that affects the planning for the proper use of your assets if you’re incapacitated, and for the proper distribution of your assets following your death. Don’t play around with this. Make sure you’ve planned properly.