Limits for qualification

  • Non-Exempt Resources
    Well Spouse - $109,560 CSRA (2010 Limits)
    Institutionalized Spouse - $2,000
    Both Spouses Institutionalized - $3,000
    Income: Not Counted
  • Unlimited Exempt Resources (DRA Home Equity <$500k-$750k Exempt)
  • Income; Excessive Income Toward Share of Costs
    Well Spouse - $2,739/month MMMNA (2010 Limits)
    Institutionalized Spouse/Individual - $35/month
    Name on the Instrument Rule applies
    Joint income to well spouse up to maximum

Exempt Resources

  • Home (DRA Home Equity <$500k-$750k Exempt)
  • Other Real Property - $6,000 or less equity or Business Property (Not Rental's)
  • Jewelry and Musical Instruments
  • Household Goods and Personal Effects
  • One "Medically Required" Automobile
  • Prepaid Irrevocable Funeral/Burial Plans (no $ limits and $1,500 designated burial funds)
  • Burial Plot - Recipient and immediate family
  • $1,500 Face Amount of Life Insurance (Term Life Insurance excepted)
  • Tools of Trade
  • Pension's/IRA's/401k's/TSA's (Annuities in IRA's OK)

Planning Techniques for Spend Down

  • Purchase Home (DRA Home Equity <$500k-$750k Exempt)
  • Pay Off Mortgage on Home
  • Mortgage Home: Conventional Loans/ Reverse Mortgages
  • Purchase of Interest in Home (DRA parent intends to live there one year +)
  • Purchase Home Furnishings or Appliances
  • Do Home Repairs or Deferred Maintenance
  • Pay Off Unsecured Debts
  • Do Medi-Cal Planning or Update Estate Plan
  • Purchase Musical Instruments or Jewelry
  • Prepay Burial Arrangements
  • Purchase Automobile
  • Make Assets Unavailable: i.e. Place Real Estate on market
  • Life Insurance: Term (DRA No Reimbursement)
  • Annuities
    • Married Couple:
    •  i. Purchase may be made for the sole benefit of either spouse
    •  ii. Payment may be used to increase income of community spouse to
          MMMNA (minimum monthly maintenance needs allowance)
    •  iii. Immediate Annuity for life or shorter period of time
    • Single Person:
    •  i. Immediate Annuity for life or shorter period of time
    • Reimbursement:
    •  i. Reimbursement claim for annuities purchased after 9/1/04
    • Beneficiary:
    •  i. Primary beneficiary - California for incapacitated person (spouse)

Other Options: *****Caution: Ineligibility Period May Apply*****

  • Gift giving:(Real property appraised at assessed value)(DRA: FMV of Real Value)
    • Outright Gifts - (DRA Cumulative Gifts added together)
    • Irrevocable Trusts
    • "Half-a-Loaf" (DRA maybe after qualifying)
  • Exempt Assets (DRA - Home equity < $500k-$750k)
  • Nonexempt Assets
    • Timing - perhaps 5 years in advance
    • Transfer of property for less than fair consideration = gift
    • Medi-Cal look back for ineligible period. Date of gift - 36 / 60 / or number of months the gift money would have paid for care (DRA 60 months from qualifying application)
    • Average Private Pay Rate (APPR), $6,311.00 per month (2010 limits)
    • Round Down (DRA No more rounding down)

Special Trusts / Contracts

  • Irrevocable Defective Income Trusts (IDIT):
    • Income Only - Non-Income House Trusts
    • Special Power of Appointment
    • Grantor defective. Substitute property of equal value
  • Special Needs Trust
    • Disabled family members
    • Surviving Spouse's Special Needs Trust (must be Probated)
  • Contracts
    • Personal Care Contracts

Legal Actions

  • Probate Code 3100 Petition - Substituted Judgment
    • Gift to spouse
    • Increase Community Spouse Resource Allowance (CSR)
  • Conservatorship - Substituted Judgment
    • Gift
  • State Fair Hearing
    • Increase CSRA - (DRA Institutionalized Spouse's income counted first)
  • Divorce
  • HARDSHIP