How to Avoid Medi-Cal Estate Recovery

An aging mother with her happy daughter

Federal law requires the state of California to collect money from the estate of a deceased Medi-Cal recipient for repayment of any long-term care services provided. This is the state’s version of the joint state-federal Medicaid program. You need an experienced trust and estate attorney to protect your assets and beneficiaries from Medi-Cal estate recovery. 

At OC Wills & Trust Attorneys, we work with clients to assist with making the necessary legal and financial arrangements for long-term care benefits while protecting their assets from estate recovery. Once you become our client, you will have comfort with our capable Medi-Cal asset protection attorney at your side. Contact our office today to learn how we can help. 

What Is Medi-Cal Estate Recovery?

Medicaid is the single largest payor of skilled nursing services in the country, and each state manages its own estate recovery program. In California, the Department of Health Care Services (DHCS) can seek repayment from the estates of deceased Medi-Cal beneficiaries for all long-term services received on or after age 55, including:

  • Nursing home care
  • In-home care
  • Hospital and prescription drug services
  • Any other services provided under Medi-Cal 

California has wide latitude in administering its Medi-Cal estate recovery program. While the state must pursue recovery from a deceased beneficiary’s estate at a minimum, DHCS can also go after other assets besides those that pass through probate. 

The state can pursue a claim against any property that belonged to the deceased at the time of death, such as assets transferred to a survivor, heir, or assignee of the Medi-Cal recipient through joint tenancy, tenancy in common, a life estate, living trust, or another arrangement. In short, all types of assets may be subject to Medi-Cal estate recovery, including:

  • The decedent’s home (or share)
  • Bank accounts 
  • Trusts
  • Insurance policies/annuities
  • Stocks and bonds
  • Other real or personal property

On the other hand, some assets are exempt from recovery, such as:

  • A life estate in which the Medi-Cal recipient held an interest that expired upon their death
  • An irrevocable trust that is created for the benefit of the deceased Medi-Cal recipient within the lookback period (see below)
  • Certain testamentary trusts established within the Medi-Cal lookback period

When individuals apply for Medicaid or MediCal, the government reviews financial transactions for disallowed transfers of money or property. The lookback period in most states is five years, which begins on the date of the application. In California, however, the lookback period is only two and a half years (30 months) for cash and liquid assets and five years for real estate (other than a personal residence). 

Ultimately, it takes a highly skilled trust and estate lawyer to help your family avoid Medi-Cal estate recovery. When you come to OC Wills & Trust attorneys, we will work tirelessly to protect your assets and your loved ones.

What Are the Limits of Medi-Cal Estate Recovery?

Federal regulations prohibit the DHCS from seeking repayment for Medi-Cal services under the following circumstances:

  • During the lifetime of a surviving spouse, regardless of where they live.
  • From a surviving child under the age of 21 or who is blind or disabled who resides in the recipient’s home
  • If a sibling with an equity interest has (1) lived in the home for at least 1 year before the deceased recipient’s nursing home admission and (2) lived in the home continuously since that date.
  • If a non-disabled adult child has (1) lived in the home for at least 2 years immediately before the deceased recipient’s admission, (2) provided care that delayed the recipient’s admission to the facility, and (3) has lived there continuously since that date.

In addition, DHCS cannot pursue Medi-Cal estate recovery if it would cause undue hardship for the survivors. In this situation, the personal representative (executor) must seek consideration of undue hardship within 30 days of the notification of the estate recovery claim. Finally, the DHCS may waive estate recovery if it determines that the estate’s value is insufficient to justify the cost.

Contact Our Experienced California Medi-Cal Estate Recovery Lawyer

Medi-Cal provides vital long-term care services to qualifying beneficiaries, but many recipients are unaware of the Medi-Cal estate recovery requirements. The best way to protect your assets and family is to consult with an experienced Medi-Cal asset protection lawyer. 

At OC Wills &Trust Attorneys, we have in-depth knowledge of the eligibility requirements for Medi-Cal. We can create an irrevocable trust that will help you qualify for these vital government benefits and avoid Medi-Cal estate recovery. Above all, you can depend on our legal team to provide informed representation and caring, efficient service. Contact our office today to set up a consultation.