Note:  The following is based on current California law.  However, the state of California is considering passing laws and regulations that will eliminate or restrict some of the planning options described below.  On March 25, 2005, the state of California adopted "emergency regulations" to make estate recovery claims on annuities purchased on or after September 1, 2004 and on life estates, and to increase the state's ability to recover Medi-Cal benefits upon the death of a  Medi-Cal beneficiary. On April 25, 2005, in response to a lawsuit filed, the state of California withdrew these regulations that were passed on an "emergency basis" and will proceed to adopt these or similar regulations though the normal public-hearing process.  You can view the proposed, but not yet adopted, replacement regulations through the following link:   Proposed Revised Regulations

The following was updated on June 23, 2008.  New federal legislation will have a significant affect on Medi-Cal (i.e., Medicaid) planning as described in this website, when the legislation is made effective in California. 

Status of New Legislation

The United States Congress passed the Deficit Reduction Act of 2005 (S. 1932) (hereinafter the "ACT" or the "DRA") that was signed into law by President Bush on February 8, 2006.

Click here to find out more about the new federal legislation

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Don't Let This Happen To You

The following are examples of what can happen to people who follow some bad advice or do not plan for their elderhood at all. Do not let these stories become your reality. Contact the Kisner Law Firm.

Don’t Use Your Home Equity To Pay For Long-Term Care
Mary was 72 years old and widowed when she entered a nursing home. Worried about how she was going to pay for her care, she contacted a friend for advice. Mary’s friend told her that she should sell her house and pay for her care with the proceeds. Not knowing what else to do, Mary followed her friend’s advice and used her home equity to pay for her nursing home care.

Pre-Need Transfers To Children
Jason suffered from Parkinson’s disease and knew that he would one day require long-term care. His son Michael, a CPA, told his father that he could easily meet Medi-Cal’s eligibility requirements. Michael also knew that the State often went after the homes of Medi-Cal beneficiaries after they died in order to reimburse Medi-Cal. So he warned his father about the estate claim that the state would make against his house when he died.

It's Never Too Late
Lori became a Medi-Cal recipient and entered a nursing home about 8 years ago when she was diagnosed with Alzheimer’s disease. She and her husband Dave owned a home together in joint-tenancy. After Lori entered the nursing home, a lawyer who was unfamiliar with Medi-Cal planning advised the couple to change the joint-tenancy on their home to community property and told Dave to create a living trust for Dave’s half-interest in the home. Dave died unexpectedly a few years later from a heart attack.

Avoiding Disqualification
Don and Carol owned a home worth $500,000 and a $90,000 bank account. Don became a Medi-Cal beneficiary 6 months ago when he suffered a stroke that paralyzed most of his body. When his wife filled out the Medi-Cal application, she did not indicate Don’s intent to return home since Don was so severely disabled and the doctors told her that Don would never recover. This had no impact on Don’s eligibility however, because the house was an exempt asset since Carol lived there.

Confusing Medi-Cal Rules With Federal Gift Tax Rules
Jean stopped working many years ago in order to provide at-home care for her ailing mother Harriet. Soon after Jean’s husband lost his job, she decided to reenter the work force in order to make ends meet. She informed her mother about these plans and the both of them agreed that Harriet’s best option was to enter a nursing home where she could receive the care that she needed.