Caring for a Parent with Dementia: Legal and Financial Options in California

Short Answer

When a parent develops dementia, families have multiple care and financial options, including home care, assisted living, skilled nursing facilities, and Medi-Cal coverage. Proper estate planning, asset protection, and long-term care planning with an estate planning attorney can ensure your parent’s needs are met while preserving home equity, assets, and the family legacy.

Introduction: The Challenges of Dementia Care

Caring for a parent with dementia involves far more than providing daily assistance — it requires careful legal, financial, and medical planning. Many families face questions about Medi-Cal eligibility, asset limits, and long-term care options.

At Moravec Varga & Mooney, we guide families through the complex landscape of estate planning, probate, and Medi-Cal coverage. Understanding the options available for your parent can reduce stress, prevent financial surprises, and ensure they receive the care they deserve.

1. Evaluating Care Options for a Parent with Dementia

Choosing the right care setting depends on your parent’s medical needs, cognitive function, and available financial resources.

Home-Based Care

• Allows seniors to remain in the familiar environment of their primary residence.

• Includes in-home caregivers, skilled nursing visits, and home health services.

• Asset protection planning can help qualify for Medi-Cal while preserving home equity.

Assisted Living Facilities

• Provides 24-hour supervision, meals, and assistance with daily activities.

• Suitable for parents with moderate memory impairment but not requiring skilled nursing.

Skilled Nursing Facilities

• Offers long-term care and skilled nursing services for advanced dementia.

• Typically requires Medi-Cal coverage or long-term care insurance due to high out-of-pocket expenses.

Adult Day Programs

• Supports parents during the day while family caregivers work or rest.

• Encourages socialization and structured activities.

2. Medi-Cal and Long-Term Care Eligibility

Medi-Cal (California Medicaid) is often a critical resource for families caring for a parent with dementia, particularly when nursing home care or skilled services are required.

Key Eligibility Considerations

• Asset-Tested Program: Evaluates both countable assets and exempt property like the primary residence and personal vehicle.

• Income Limitations: Eligibility requires careful assessment of retirement income, pensions, and savings.

• Home Equity Rules: Seniors can retain equity in a principal residence up to state-defined limits; excess equity may require asset planning or trust strategies.

• Estate Recovery: Medi-Cal may pursue claims after death, but proper estate planning can reduce risk of estate recovery and protect beneficiaries.

Working with an estate planning attorney ensures program requirements are met while preserving assets and family legacy.

3. Financial and Legal Planning Strategies

A. Asset Protection and Estate Planning

• Revocable and irrevocable trusts shield assets and home equity from estate recovery while meeting Medi-Cal eligibility.

• Life estates or joint tenancy allows continued residence while transferring future ownership to heirs.

• Exempt assets such as personal vehicles, burial plots, and basic household items typically remain protected.

B. Long-Term Care Insurance

• Supplements Medi-Cal coverage or covers care costs before eligibility.

• Protects retirement savings and reduces out-of-pocket expenses.

C. Coordinating Income and Assets

• Proper management of retirement accounts, pension funds, and savings can optimize asset qualification.

• Ensures your parent’s eligibility without depleting the estate prematurely.

4. Probate, Estate Recovery, and Family Protection

Even with careful planning, families must consider estate recovery and probate implications:

• Medi-Cal Estate Recovery: State may file claims on the estate to recover costs of nursing home care or other Medi-Cal benefits.

• Probate Avoidance: Using trusts and property transfers can minimize court involvement and protect home equity.

• Executor and Beneficiary Planning: Clear designation of personal representatives ensures smooth estate settlement.

• Legal Safeguards: Working with an estate planning attorney ensures compliance with California law while protecting family interests.

Conclusion: Protecting Your Parent and Family Legacy

Caring for a parent with dementia requires more than compassion — it demands legal insight, financial planning, and strategic estate management. By understanding care options, navigating Medi-Cal eligibility, and implementing asset protection strategies, families can secure their parent’s well-being while preserving the home, assets, and family legacy.

At Moravec Varga & Mooney, we specialize in Probate, Trusts & Wills, Trust Administration, Medi-Cal Planning, and Estate Tax.

Call Moravec Varga & Mooney today for a confidential consultation. Our team will help you explore care options, protect your parent’s assets, and ensure a secure future for your family.