A new elder law provides families of Medi-Cal recipients with appended
opportunities to circumvent reimbursing the State of California for benefits
paid on behalf of their parents or loved ones. It incorporates
changes to the Medi-Cal estate recovery program that has significant advantages.
Starting on January 1st, 2017, when a Medi-Cal recipient dies, there will
be no claim against the estate of the surviving spouse. And, DHCS Medi-Cal
estate claims will be asserted only on properties subject to
probate. Any property held by joint tenancy deed, or held within an ordinary revocable
trust, will be exempt from estate claims.
As an example, when a Medi-Cal recipient sells their home, the proceeds
of the sale disqualify them from continued benefits. But, if the home
is sheltered within an irrevocable trust, the house can be sold, and the
proceeds would be protected. Also, rental income won’t have to be
paid to a nursing home as part of a Medi-Cal recipient’s monthly
share of the cost.
The 65+ group searches for ways to preserve wealth for themselves and their
children and grandchildren. Nina Kohn, who chairs both the
Aging and the Law Section of the Association of American Law Schools, and the Elder Rights
Committee of the American Bar Association, states that seniors should
be made aware of alternative options in estate planning. And, that their
attorneys can help them to minimize the risk of outliving their savings
while maximizing the money they can leave to heirs.
Here Are the Basic Changes:
- Recovery will be limited to federal guidelines, so Medi-Cal cannot recover
monthly payments to managed care plans on your behalf. Also, the new rules
protect your home when the fair market value is 50 percent or less of
the average home price in the enrollee’s county at the time of death.
- The new rules disallow the state to touch your assets when you have a surviving
spouse or domestic partner— even after that person dies. There’s
no more recovery from surviving spouses and registered domestic partners.
- The new rules limit recovery to assets that are subject to probate. However,
there are ways to protect your property from probate, including the use
of living trusts, joint tenancies, naming beneficiaries on retirement
accounts, etc. It is worth noting here that wills are subject to probate.
If your heirs can't afford to pay the estate recovery claim on your
home immediately, the state may require them to sign a “voluntary lien.” The state charges seven percent interest on those liens, but under
the new rules, people in this situation will face a significantly lower
It’s important to talk to an elder law attorney about legal methods
to protect your home and other assets from a Medi-Cal lien. The Law Offices
of James C. Shields can answer your questions and discuss your unique
situation. Contact us to get advice that is accurate and trustworthy.