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 interest rate.
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.