Modern Estate Planning Blog

As a Sacramento wills lawyer, I am all too familiar with the following scenario–mom or dad can no longer take care of themselves and the family needs to bring in some form of additional care. Perhaps that’s care from a nursing home, or maybe just some help around the house a few days a week, but regardless of services, the family will often require some form of assistance to afford the costs.

The devastation comes when mom and dad find out they don’t qualify for Medi-Cal or any other assistance because they own too much. And “too much” is usually an overstatement. Mom or dad may only have a tiny bit of money in the bank or own a modest home and still can’t qualify for help.

This situation is heartbreaking as the family is then forced to sell or use up the remaining assets to cover their care. Not only does this mean there will be no inheritance left for the children, but the possibility still remains that mom or dad will outlive their funds and their children will be forced to pick up the tab.

Scrambling to put mom or dad’s assets into a joint account with one of the children doesn’t help the situation either. There are “look back periods” where the government can see if you’ve attempted to hide funds. Not to mention, money in a joint account still counts as a qualifying “asset” to the person applying for government assistance and ultimately works against them in the end.

So how is it possible for mom or dad to qualify for Medi-Cal without losing everything they own in the process?

One solution is an irrevocable trust. With an irrevocable trust, your parent’s assets will be “owned” by the trust and not them personally. That way when they apply for assistance, they will most likely qualify as they don’t technically own anything in their name.

In my opinion as a Sacramento wills lawyer, an irrevocable trust is the smartest (and unquestionably the most cost-effective) way to shield your parent’s assets from the hands of a nursing home or other long-term care facilities.

However, as I mentioned earlier, there is a look back period when attempting to qualify for any type of assistance, so it’s very important that you sit down with mom or dad as soon as possible to discuss how your family would handle the financial aspects of disability or incapacity before it happens. Then you can work with your parents, in addition to a qualified Sacramento wills lawyer, to make sure their assets are properly and safely transferred into the name of an irrevocable trust.

Remember, you don’t have to sit back idly while a nursing home or elder care facility stakes claim to everything your parents have worked so hard for through the years simply because they couldn’t qualify for assistance. Instead, I encourage you to be proactive, plan ahead and educate your parents on the benefits of having an irrevocable trust. It’s the only way to protect their assets (and your inheritance!) now, and for years to come.