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Losing It All to Medi-Cal
Jun 28, 2012

Hello Mr. Chambers: I have been HIV+ for many, many years. Since I've not yet met my demise I would like to sell my home and purchase a number of niceties with the proceeds, to make my life a thing more worth fighting for. A car for instance (I live in Los Angeles), and buttock restoration in Mexico (I have serious Lipoatrophy), and some other things. I've been told that a suitable attorney can draw up a trust which will enable me to appoint a trustee who will dole out the monies I need for each procedure or purchase, but am also hearing horror stories of people for whom this method did not work. People who thought their trust was airtight, until Medi-Cal and it's domestic Luftwaffe stormed through the documents and absconded with the cash those people had relied upon to better their lives. What do you know about the efficacy of these trusts? In your experience and opinion, is it possible to circumvent the greedy claws of Medi-Cal (which doctors have told me is known for marching in and snatching the assets of a deceased person before that person's relatives have even been notified of the death!) with paperwork? I would just as soon remain in my home of 26 yrs, but would have a whole new life ahead of me if I could have my body repaired and get some wheels. Please Sir, I need your input. Thank you.

Response from Mr. Chambers

Medi-Cal (Medicaid's name in California) can be strict about meeting the resource requirements. From your question, it sounds like you want to take a resource that is exempt from Medi-Cal's resource requirements (your home) and sell it for money which is NOT exempt from Medi-Cal requirements. You are correct that such a move would cost you your Medi-Cal coverage.

One way around that is what is called a "Special Needs Trust." This is a legal trust that locks your assets/resources away so that Medi-Cal ignores it and maintains your Medi-Cal eligibility. To my knowledge, these documents are well tested and usually quite good.

You will need an experienced attorney to draw up the document and they can run a few thousand dollars to create. Most attorneys who deal in Elder Care are experienced with Special Needs Trusts and can help you.

As far as Medi-Cal putting a lien on your house to recoup what they have spent after your death, I honestly don't know a way around that. However, there are some exceptions to those liens. You can get more information here.

Before moving out of your home, however, I would encourage to meet with a financial counselor to see if this a financially responsible move. You will need to carefully budget and realize that a large part of the money you will get from the sale of your house will have to go to pay for your housing for the remainder of your life.

One final thought, if you are 62 or older, you may want to look into a Reverse Mortgage. With that, you can stay in your home and still get some cash out of it.

Good luck, Jacques You can get more information here.

Cobra to HIPAA policy moving
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