How to Avoid Medi-Cal Estate Recovery In California

An aging mother with her happy daughter

Getting Medi-Cal is difficult enough. It’s even harder to keep it after your death. Federal law requires the state of California to seek repayment for long-term care services provided to any deceased Medi-Cal recipient. 

For Orange County residents, this means that your estate may not be protected after your death. As a result, your children could receive less money than they are truly entitled to. 

Our dedicated team of lawyers at OC Wills & Trust Attorneys works with clients to make legal and financial arrangements for long-term care benefits while also protecting your beneficiaries from Medi-Cal estate recovery in California.

What is Medi-Cal estate recovery?

The state of California can attempt to recoup reimbursement after the death of any individual who was:

  • 55 or older at the time they began receiving Medi-Cal benefits 
  • Permanently institutionalized at the time of their death

Actually, the state is required to attempt to recoup reimbursement in these cases. Thus, unless you own nothing at the time of your death, your estate is in danger if you meet the above qualifications. 

What long-term services can the Department of Health Care Services (DHCS) seek repayment for? 

Medi-Cal estate recovery is more all-encompassing than you may think. The DHCS can seek repayment for the following services:

  • Nursing home care
  • In-home care
  • Hospital services
  • Prescription drug services
  • Any other services that Medi-Cal provides

When taken collectively, DHCS recovery for these services can be a massive expense. 

Can the DHCS take your home after you die?

Not only can the DHCS pursue a claim against your home after your death. It can also pursue claims against any property you owned at the time of your death, including the following:

Note that some assets are protected from DHCS recovery, including the following:

  • Life estates in which the deceased held an interest that expired upon their death
  • Irrevocable trusts created for Medi-Cal recipients within the lookback period
  • Certain testamentary trusts created within the Medi-Cal lookback period

The lookback period in California is a time in which the government reviews transactions for disallowed monetary and property transfers. It lasts 30 months for cash/liquid assets and five years for real estate, excluding your personal residence. An experienced lawyer can help you protect your assets from DHCS recovery. 

In what circumstances is Medi-Cal estate recovery prohibited? 

Our team of attorneys puts together a list detailing the limits of Medi-Cal estate recovery. Federal regulations prevent the DHCS from pursuing recovery for Medi-Cal services in the following circumstances: 

  • The deceased’s spouse is still alive, whether they live in California or not
  • A disabled underaged child of the deceased resides in the deceased’s home

Medi-Cal services are also barred from pursuing recovery when a sibling of the deceased with an equity interest in the home lived there for at least one year before the deceased was admitted to a nursing home. 

The same is true in cases where an able-bodied adult child lived in the home for two years before the deceased was admitted to a nursing home. However, that adult child must have provided care that delayed the deceased’s admission to the care facility. 

In these circumstances, federal regulations protect these individuals and allow them to continue enjoying their quality of life without the risk of DHCS Medi-Cal recovery. 

How an Orange County attorney help you avoid Medi-Cal estate recovery

If you or a loved one hopes to avoid Medi-Cal estate recovery, it is imperative that you contact a reputable law firm in the Orange County area as soon as possible. Local lawyers can understand the complexities of constantly changing California law and help you ensure your beneficiaries receive as much of your estate as they are entitled to. 

Risks of Proceeding Without a Lawyer

Like anyone who tries to handle their legal issues alone, you’re facing serious risks if you choose to attempt to avoid Medi-Cal estate recovery without the aid of a dedicated team of attorneys.

For instance, you may inadvertently overcompensate the DHCS. This can result in further legal issues to handle during the 30-month lookback period for cash/liquid assets or the five-year lookback period for real estate. You may also inadvertently overcompensate the DHCS and be unable, for whatever reason, to obtain monetary repayment.

And depending on how long your loved one received care, you could lose your home and life savings if you are unable to avoid Medi-Cal estate recovery. These and other potential risks demonstrate that it is essential to retain legal counsel as you begin your estate planning journey. 

Contact OC Wills & Trust Attorneys Today

Avoiding Medi-Cal estate recovery could prevent you from losing your property and every dollar your parent ever saved. Medicaid has the ability to force the sale of a person’s home, which results in devastating consequences for families and communities — both financial and emotional. 

The aid of a trusted legal professional can help you avoid Medi-Cal estate recovery in California, and prevent you from losing your most valuable possessions, including your home. Our dedicated team of lawyers at OC Wills & Trust Attorneys will work with you to create a comprehensive plan to help you protect your estate. Contact OC Wills & Trust Attorneys today to learn more.