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How to Plan For Your Medi-Cal Benefits

The ever-increasing costs of healthcare in retirement have got many people and their loved ones dipping into savings to cover healthcare. Fortunately, there are options available that can help ease the stress of your increasing health costs. California Medi-Cal benefits is one. It’s a joint state and federal program available to help California residents pay for healthcare, including skilled nursing home care. Qualifying for Medi-Cal can be challenging and there are some things you need to consider in order to make sure that you receive proper Medi-Cal benefits.

4 ways to ensure you receive proper California Medi-Cal benefits:

Do Your Research Before Applying

Do your homework before applying for Medi-Cal benefits. Make sure you understand the what, why, how of it. There are rules related to marital status, health, assets, and income that determine your eligibility. However, if you qualify, then Medi-Cal can pay not only for your medical care received in a nursing home, but also for equipment, physical therapy, supplies, medicine, and other necessary care related expenses. One rule can affect how another rule applies to you specifically. That’s why it is recommended that you do your research to determine how you should proceed.

Avoid Mistakes When Applying

Medi-Cal can help families with paying for medicines, doctor’s visits, nursing home care, and more. Making even a minor mistake in the Medi-Cal application process can result in smaller benefit amounts, benefit delays, or even disqualification from the program. Take the time to be careful and make sure that there are no mistakes when applying. This is because any mistake made in documentation or on a form can cause significant delays in qualification for Medi-Cal.

Plan for Estate Recovery

Once Medi-Cal benefits have approval, you may still end up paying back the cost of care if you don’t plan properly. When a person has Medi-Cal benefits, after they pass away, the state will usually request back the money that Medi-Cal spent on their care from their estate. It’s known as estate recovery. In many cases, the money is acquired from the forced sale of the Medi-Cal recipient’s home. With proper planning, you can avoid the pitfalls of estate recovery.

Consult a Medi-Cal Planning Attorney

Applying and qualifying for California Medi-Cal benefits is challenging and complicated. That’s why you should consult an attorney who works with Medi-Cal benefits planning. This attorney can protect your hard-earned assets by avoiding estate recovery. They’ll help you plan for your family’s specific situation and give you the most up-to-date advice. Rules and regulations change often. You’ll save money, time, frustration, and maybe your house, throughout this important care planning process.

Filed under Legal Services

As the AB Living Trust an Out of Date Tool?

When preparing an estate plan, there are many different factors to be considered. This can include tax implications and when beneficiaries will be able to access their portion of the estate. The AB living trust is one of the best avenues to accomplish goals for those who want to protect their assets and avoid paying estate taxes.

What is an AB Trust?

An AB living trust is a joint trust often set up for married couples. It controls how the property will be divided after the death of a spouse. The primary objective of an AB trust is to help the surviving spouse avoid paying the estate taxes after their partner’s death.

At death, the trust gets divided into two different trusts. One trust (A) is a revocable one in the name of the surviving spouse, and the other (B) is irrevocable and in the name of the deceased spouse. The surviving spouse can access income during their own lifetime from the irrevocable trust (B). The revocable trust (A) can be modified anytime by the surviving spouse, meaning they can access the principal and income. However, after the second spouse dies, the principal of the joint trusts will be held for beneficiaries.  

The Goal of AB Trusts

The AB trust was designed to decrease the federal estate tax a surviving spouse would pay after losing their spouse. After the death of the first spouse, the share of the trust of that spouse passes through to an irrevocable trust. This is because legally, the surviving spouse never owned that property.

AB living trusts were very helpful in the past in decreasing estate taxes when the federal gift and estate tax exemptions were relatively lower. The estate and gift tax exemption is currently $11.4 million per individual, up from $11.18 million in 2018. Anything valued at less than this amount is exempt from federal estate taxes. This makes AB living trusts more valuable and useful in reducing taxes owed.

Are AB Trusts Out of Date?

Short answer, no. In most situations, an AB trust is still very useful. If you want to make sure that only certain individuals inherit a portion of your estate, then this arrangement is particularly helpful because your spouse cannot alter the beneficiaries of the irrevocable part of the trust. In this way, the AB trust preserves at least a portion of the deceased’s estate. This keeps a spouse from using it or spending it in any way other than what the deceased spouse intended.

AB trusts are also useful for people in a second marriage who want to preserve assets for their kids. In an AB trust, the surviving spouse can receive the benefits from property in the irrevocable trust. However, the remainder of it can be routed to the children of the deceased spouse upon the death of the second spouse.

Filed under Estate Planning Tips, Legal Services