Living Trust Protections for African Americans
No one is safe from the Covid-19 global pandemic; however, evidence has emerged that indicates certain minority groups are at even greater risk. According to the Centers for Disease Control and Prevention (CDC), some racial and ethnic minority groups, including non-Hispanic Black persons, Hispanics and Latinos, and American Indians/Alaska Natives, experience higher rates of hospitalization or death from COVID-19 than among non-Hispanic white persons.[1] Many older African Americans who contract the virus will turn to Medi-Cal to help cover their medical costs. Doing so, however, could put their estate assets at risk, because of the Medi-Cal Estate Recovery Program. The good news is that creating a Living Trust can prevent the State of California from coming after your estate.
African Americans May Be at High Risk for Covid-19 Complications
As experts work around the clock to analyze the Covid-19 virus, it is becoming clear that the virus poses a more serious threat to certain groups of people than it does to others. As of June 2020, age-adjusted hospitalization rates are highest among non-Hispanic American Indian or Alaska Native and non-Hispanic black persons, followed by Hispanic or Latino persons. In fact, these ethnic groups have a rate approximately 5 times that of white persons, according to data released by the CDC. In addition, those over the age of 60 appear to be at a significantly higher risk of experiencing serious complications or death as a result of contracting Covid-19.
Now Is the Time to Protect Your Estate
While it may be difficult to contemplate a worst-case scenario, doing so can protect your assets in the event that worst case scenario comes to pass. If you are an older African American, you may depend on Medi-Cal to help cover costs associated with long-term care. Medi-Cal is the name given to the Medicaid program in California. The high cost of long-term care prompts many older Americans to rely on Medicaid (Medi-Cal in California) to help pay for their care.
What you may not know is that Medi-Cal has the right to try and recover money spent on recipients through the Medi-Cal Estate Recovery Program (MERP). In fact, until just a few years ago the State of California was able to place a lien on all estate assets when a recipient passed away. Imagine spending a lifetime paying for your home and planning to pass it on to your children, only to have the state take it after you are gone. The good news is that California Recovery Reform Act in 2017 stops claims from being placed on the estate of a Medi-Cal recipient after they are gone, however, they must be transferred into a Living Trust.
Avoiding Probate and Medi-Cal Recovery
If assets are left in your name at the time of your death, those assets will be subject to probate in California. Those same assets may be subject to recovery by the State of California if you received benefits from the Medi-Cal program. By placing your home in a Living Trust now, Medi-Cal cannot pursue your home for repayment after you are gone. In addition, by transferring assets into a Living Trust your estate may avoid probate because those assets will be owned by the trust at the time of your death, not by you personally.
Do not wait until you are faced with the need to qualify for Medi-Cal benefits. Plan now for that possibility. To ensure that all your assets, including personal items, cash accounts, and your home, are protected and kept out of probate, make sure an experienced estate planning attorney prepares your Living Trust. It is the ONLY way to ensure that your family will be protected from the cost and stress of probate and your assets will be safe from Medi-Cal Recovery. Attend a free webinar to learn more about how we help you with Living Trust Protections.
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