Modern Estate Planning Blog

As a Folsom elder law lawyer, I whole-heartedly believe that Medi-Cal is a solid option available for seniors in the Sacramento area who need help paying for long-term care. Medi-Cal is a needs-based program, meaning that strict income and asset limits are adhered to and seniors and elders can face penalties if they do not meet those limits. There are some exceptions for assets that remain uncountable for Medi-Cal purposes, including a house or a car. However, after the senior passes away, Federal law instructs that the state of California must try to collect on the costs the program paid out from the senior’s estate. There are typically two ways that California will try to collect from the deceased’s estate: through estate asset recovery and voluntary real estate liens.

Estate Asset Recovery

In order to collect from a Medi-Cal beneficiary’s estate, the state must submit a claim to the probate court for any expenses owed by the estate. However, there has recently been some confusion as to what the state can collect, since California changed the laws regarding recovery from Medi-Cal beneficiaries’ estates this past year. Prior to January 1, 2017, the state could seek recovery payments from all assets owned by a decedent at the time of their death. Those assets included all solely-held and jointly-held assets, as well as any assets that the decedent had an interest in but did not pass through the probate estate. This list includes any jointly-owned bank accounts and real estate, and anything that may have been held in a Trust. However, for any Medi-Cal beneficiaries that die after January 1, 2017, the state may only collect on probate assets, which are typically any assets that were solely-held by the decedent at the time of death.

Real Estate Lien

You may discover that a lien has been placed on a Medi-Cal beneficiary’s estate. This is done to “hold” property until the person receiving Medi-Cal dies. After the death of the Medi-Cal beneficiary, the heirs may agree to a voluntary lien against the property to satisfy claims. When the property is sold, the state will collect whatever is owed to them by the estate just the same as a mortgage would be paid off, or how a tax lien would be satisfied.

There are circumstances when the state cannot recover the costs of Medi-Cal care. These are typically when there is a surviving spouse, a disabled or minor child, or a sibling or child caregiver who provided care for a certain amount of time before the beneficiary was moved to a long-term care facility.

If you would like to learn more about the Medi-Cal process, or if you’d like to discuss your options for Medi-Cal planning for yourself or a loved one, please set up an appointment at our Folsom elder law office by calling (916) 241-9661.

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