Understanding eligibility rules for Medi-Cal skilled nursing home benefits

Dear Len & Rosie,

My mom is in a nursing home because she needs more care than I can give her at home. After next month, she will only have her IRA to use for payments. She gets $471 in Social Security as her only income. This pays for her telephone, bills, going to dinner or a movie with a friend on the weekend, and other miscellaneous expenses. I was told when her money is under a certain amount, Medi-Cal will pay for her nursing home care. Before this happens, do we have to break her IRA to use to pay for the nursing home, or can Medi-Cal take over before that. Also what happens to her Social Security and any savings she has?

Sandy

Dear Sandy,

It’s good that you wrote us because many people in your mother’s situation would simply cash in their IRA or other retirement accounts when they don’t need to. Under the eligibility rules for Medi-Cal skilled nursing home benefits, your mother, assuming she’s not married, can have only $2,000 in non-exempt assets to qualify for benefits.

The term “non-exempt assets” is important, because there are many assets that don’t count for eligibility, and one of them is retirement accounts, including your mother’s IRA. Any retirement account owned by your doesn’t count against the $2,000 resource limit, as long as your mother is taking annual minimum distributions, which are required after she turns age 70 and 1/2, but can be started earlier if necessary.

Your mother should be eligible now if she has less than $2,000, not counting her IRA, her home, one automobile, her personal possessions, burial plot, and other miscellaneous exempt assets. If she’s a bit over the limit and hasn’t paid for her final expenses yet, she can buy a prepaid cremation or burial plan which won’t count against the $2,000 limit as long as it’s an irrevocable plan that she can’t cash in.

As for your mother’s income, when she qualifies for nursing home benefits, she will have a share of cost equal to all of her monthly income except for $35. Fortunately she’ll be able to use money from her retirement account to pay for the extra things she needs. If her retirement account runs dry, it’ll be up to you and the rest of the family to chip in to supplement the care Medi-Cal provides her.

If she qualifies for Medi-Cal benefits she should act to shelter her remaining exempt assets, because Medi-Cal will assert an estate reimbursement claim against whatever your mother owns upon her death. The IRA will be safe as long as she leaves it to named beneficiaries upon her death. If she owns a car, she should probably sign it over to one of her children sooner or later. If, however, she owns a house, then it’s very important for her to see an elder law attorney to talk about putting the home into an irrevocable trust to protect it from a future Medi-Cal estate claim.

Len & Rosie

Needle in a haystack....How to know if you are in a someone's Will.

Dear Len & Rosie,

For years, an uncle of mine would pull me aside and tell me I was named in his will. At one time, he told me the name of his lawyer, but being young and foolish, I lost it. Is there anything public that is recorded at the time of someone’s death in regards to their will? How do I go about finding out if there was anything he wanted me to have? He always told me in secret. He told me he didn’t want his wife’s children to get it all. All I want to know is if there’s a way to find out what his wishes were, and that they were carried out. How do I go about that if I don’t even know his lawyer’s name?

Becky

Dear Becky,

You’re looking for a needle in a haystack. You should probably ask his wife in as polite a way as humanly possible. Don’t call up a widow and start asking her for money. That’s in bad taste. But there’s nothing wrong with mailing her a polite note where you ask if your uncle had a will or a trust and whether or not you’re entitled to anything, because that’s what you heard. Then apologize for even sending the letter, but say you had to ask because you really needed to know. If your uncle has children, you can ask them too.

If you’re not willing to ask the hard questions, then you should understand that it’s extremely unlikely that your uncle’s will or trust leaves you anything until after your aunt has also died. Unless he was married to his wife for only a short time, he likely put her needs above yours or any of his other relatives.

If your uncle has a will, the will probably says something like this: “I leave everything to my darling wife, and if she dies before me, I leave it all to my niece Becky and the rest of my family tree, except maybe for that nephew who never calls and never writes.”  If your uncle’s will says that, then drop it. The wife got everything, and if you’re nice to her, she may leave you something upon her death out of the kindness of her heart.

While your uncle may have left a gift for you on his will, even if his wife is still alive, remember that his will controls the disposition of only those assets titled in his name alone, with no joint tenants or pay-on-death beneficiaries, or assets held in a trust. If he was married to his wife for a long time, it’s likely there’s nothing you’ll inherit, at least until your aunt’s passing.

You can check the superior court in the county where your uncle resided for a copy of his will. His original will should have been lodged with the court within thirty days of his death. You can also get a copy of the deed to his home to see if any of the property will be subject to probate, and you can also see whether or not your uncle and his wife created a trust. If the home is in the trust, the lawyer’s name may be found somewhere on the deed. Call the lawyer with your sensitive questions if you are not willing to ask your aunt.

Len & Rosie