The 3 different stages of Medi-Cal planning.

Dear Len & Rosie,

My husband has Alzheimer’s and has been in a nursing home for three years. I qualified him for Medi-Cal shortly after he was placed. I have had conflicting answers about assets I can keep when he passes away. Our monthly income is just under $2,000. My earned income is very low, and I would love to work more but am afraid I would have to give my income back to the government and get stuck in a maze bureaucratic paperwork.


Dear Ruby,

Medi-Cal planning is divided into three different stages: Eligibility, Share of Cost, and Estate Recovery. You took care of the first step three years ago. When your husband qualified for benefits, you had ninety days to remove from his name all of his non-exempt assets (your non-retirement account investments, mostly). So right now, everything should be in your name alone, except for maybe the house. And don’t worry about acquiring new assets. You could win the lottery and your husband won’t lose Medi-Cal. Any “after-acquired assets” you get in the future won’t count against your husband’s continuing eligibility.

Your husband’s Share of Cost is the amount of money he has to pay to the nursing home each month, before Medi-Cal picks up the rest. You get to keep all the money you earn, regardless of the amount.  Also, if your monthly income is less than $3,023 a month (for 2017), you get to take as much of your husband’s income as is needed to bring you up to $3,023.  The rest of your husband's monthly income, except for a $35 “personal needs allowance”, must be paid to the nursing home as his share of cost. Feel free to get a job and earn as much as you can. You may have to give up some of your husband’s income, but you won’t lose any of yours.

The third stage, Estate Recovery, is a lot easier than it used to be. The new rules, effective January 1, 2017, are summarized as follows: 1) There’s no estate claim if the recipient is survived by a spouse, or by a minor, blind, or disabled child; and 2) Estate claims are now limited to assets that are subject to probate - that is, assets owned by the recipient on death that are outside of a trust and do not have a designated beneficiary or joint tenant.

If you die first and the home is held jointly with your husband, then it will be at risk of being subject to Medi-Cal’s estate claim. However, if you transfer the home to a trust, even an ordinary revocable trust, it will be protected for your children even if you pass before your husband. For this reason, you should meet with an attorney to make sure that everything is in order.

Len & Rosie