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Can an irrevocable trust help you qualify for Medi-Cal?

On Behalf of | Mar 1, 2024 | Medi-Cal and Long Term Care Planning

You must meet strict income and asset requirements to qualify for Medi-Cal, California’s Medicaid program. These limits may pose a significant challenge, as applicants often resort to depleting their savings and assets to qualify for assistance. However, this does not have to be the case.

You can potentially navigate these eligibility rules and qualify for Medi-Cal benefits with a proper planning strategy. An irrevocable trust can be a valuable tool in helping you achieve this aim.

How does it work?

An irrevocable trust is a separate legal entity distinct from the person who creates it. When you transfer assets to a trust, their legal ownership changes, and they are no longer considered your property. Instead, the trust owns them, and their value will not count towards your asset limit assessment for Medi-Cal eligibility.

An irrevocable trust can be particularly beneficial if you want to qualify for Medi-Cal while preserving assets for your beneficiaries. That said, there are strict regulations that you must follow when creating and administering an irrevocable trust for Medi-Cal planning purposes. For instance, the trust must be properly drafted and administered to ensure compliance with Medi-Cal rules. Additionally, transfers of assets into an irrevocable trust may be subject to a “look-back period,” during which Medi-Cal will review your asset transfers for any irregularities.

Do not risk costly mistakes

If you are considering using an irrevocable trust to plan for your long-term care while looking out for your loved ones’ financial well-being, it is essential to seek legal guidance. You do not want to end up with an improper, void or invalid irrevocable trust that will not do the job when it matters most.