Did you know that Medi-Cal can file a lien against your probate estate, including your home, to get reimbursed for all the benefits paid to you? In some cases, this can wipe out most or all of a person's estate, thus leaving little to heirs. Let me show you how to protect your hard-earned assets from Medi-Cal liens with a living trust.
“Medicaid” is a federal program that enables states to provide medical assistance to impoverished individuals. It is administered by the respective states and goes by different names, according to the state involved. In California, the program is called “Medi-Cal.”
An individual’s entitlement to Medi-Cal benefits depends on the financial resources available to him or her. Under Medi-Cal rules a person is not required to sell his or her residence to qualify for benefits. However, the State will have a claim against the residence for reimbursement of benefits paid. This claim for reimbursement, with few exceptions, attaches to the residence upon the recipient’s death.
The probate court requires a verified statement regarding whether or not the deceased person was a Medi-Cal recipient. If so, Medi-Cal must be reimbursed before distribution to heirs can be made. If the estate is distributed without notifying the state or giving the state an opportunity to seek reimbursement, the State can make a claim directly against the heirs of the deceased person that received the property in question!
In the past people who wanted to both qualify for Medi-Cal and preserve their home as an inheritance for their family often transferred the home out of their names and into that of a child or other relative. As of last year, Medi-Cal recovery rules regarding the definition of “estate” have changed and it is no longer wise to transfer the ownership of the family home to another individual to avoid the Medi-Cal lien after death.
While it is true that Medi-Cal can place a lien on a person’s estate during the probate process, Medi-Cal liens are no longer applied to property held in a revocable living trust. As a result of this important change in the law, rather than putting your property in someone else’s name to avoid the Medi-Cal lien after death, simply create a revocable living trust and place your property in the trust.
Contact me to set up a free estate planning consultation today at 415-235-9162!