Legal Question in Elder Law in California

Understand the difference between Medicare and Medi-Cal.

Everyone gets Medicare when they turn age 65, or have been on SSDI for two years. It's insurance. It doesn't matter what your mother owns in real property or liquid assets, She never loses her Medicare. However, Medicare does not pay for assisted living or nursing home care.

Medi-Cal will pay for nursing home care, but only if your mother has less than $2,000 in countable assets. The home doesn't count. This means if she sells the home for cash, then she'll be disqualified for Medi-Cal benefits.

One option, if your mother is on Medi-Cal or is likely to need Medi-Cal in the future, is to transfer the home to an irrevocable trust designed specifically to shelter assets from Medi-Cal. The transfer of the home is without penalty, as it's an exempt asset under Medi-Cal eligibility rules. Then, the irrevocable trust can sell the home, even taking the $250,000 capital gains tax deduction for selling your mother's residence, and the proceeds of the sale will be protected within the irrevocable trust so they won't disqualify your mother for benefits and they won't be subject to Medi-Cal estate claims after your mother's death.