Medicaid and Your Estate Plan


When thinking about managing their personal finances, most people focus exclusively on retirement planning and estate planning. Unfortunately, this overlooks the importance of planning for any end of life care you may need.

As the life expectancy of the average adult continues to increase, so do the odds that you'll require some form of end of life care. Since nursing home bills can easily average $7,000 or more per month in California, proper planning is crucial. Younger working adults are encouraged to invest in long term care insurance, but this newer coverage is not typically applicable to those currently in need of care. For those who aren't able to pay out of pocket, Medicaid often fills in the gaps.

Medicaid classifies assets as either exempt or nonexempt. Exempt assets include personal belongings, one vehicle, the home you live in, income producing real estate, burial plots, burial funds, and funeral contracts. Non-exempt assets include cash, savings, checking accounts, stocks, bonds, mutual funds, IRAs, multiple vehicles and/or recreational vehicles, and non-income producing real estate. When non-exempt assets exceed the eligibility threshold, Medicaid assistance is not available to pay for the cost of long term nursing care.

The goal of any estate plan should be to provide for the security of your loved ones, such as a spouse who may also face a similar health crisis, by minimizing the value of your non-exempt Medicaid assets without wiping out your total estate. You are permitted to spend down or transfer assets to qualify for Medi-Cal (California's Medicaid program) within certain parameters. This requires assistance from an attorney familiar with Medi-Cal rules, however, as there are significant penalties for failing to follow the state's complicated guidelines.

Medi-Cal looks back 60 months (5 years) from the application date to determine if the applicant's finances are in order. This means that estate planning should be done as soon as possible in order to ensure a secure future for both you and your loved ones.

How Can We Help?

Our Pasadena estate planning attorneys can help you create a plan that best addresses your specific needs, including making sure that you'll be able to obtain any end of life care that you may require. Please call our office at (626) 683-8113 or email us at to schedule an appointment.