Wednesday, March 21, 2012

Why I Don't Do Medi-Cal Planning

By David A. Diamond

I often get calls from prospective clients about Medi-Cal planning.  Medi-Cal is California’s version of Medicaid, which is a welfare program for poor people, some of whom are elderly -- not to be confused with Medicare, which is a government subsidized health care program for elderly people. Medi-Cal planning is a sub-specialty of estate planning that often comes under the heading “elder law.”

Elder law attorneys who provide Medi-Cal planning services typically advise elderly clients who need to move into an assisted living facility or nursing home how to give away their residence and financial assets, usually to their children, so they can qualify for Medi-Cal long-term care benefits. In other words, these attorneys help people transfer their assets to their children so they appear poor when they apply for Medi-Cal. It is often the children’s idea to get mom on Medi-Cal so that her nursing home care can be paid for by the state’s taxpayers (you, me, and every other working Californian), while the children enjoy their new found wealth.

Elder law attorneys will argue that what they are doing is legal (admittedly, it is), that they are just protecting the elder's life savings, and that they are only playing by the rules of the game.  Some will also argue that this is no different than arranging rich people’s estate plans so that they pay less estate tax. However, in my humble opinion, there is an important distinction between helping people avoid paying more tax into the system in the first place (estate and gift tax planning) and giving assets away in order to qualify for a taxpayer-funded government handout (Medi-Cal planning).

As a lawyer, I merely find Medi-Cal planning distasteful.  But as a taxpayer, I find it outrageous.  So when prospective clients call me with Medi-Cal questions, I refer them to my elder law colleagues who operate in that particular sub-specialty of estate planning law.  I am not legally obligated to take every client who comes my way, and life is way too short to provide legal services that I find personally offensive.


David A. Diamond
Hines Carr Diamond LLP
1561 Third St., Napa, CA 94559
Tel 707.258.6234 | Fax 707.258.6264 |
Certified Specialist, Estate Planning, Trust & Probate Law
California State Bar Board of Legal Specialization

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