How can I protect my Home if I am on Medi-Cal? Part 1 – the Problem

I have heard on numerous occasions from purported “experts” in Medi-Cal planning that the home is “completely exemp for Medi-Cal.”  Unfortunately this is “not completely correct” and your family could have a big surprise if proper planning is not done while you are competent to do so…read more.

In California, a residence is exempt if it is your residence and you intend to return home. However, this exemption is for ELIGIBILITY purposes only.  It is NOT EXEMPT from “recovery”.  In other words, after a Medi-Cal recipient passes away, the Department of Health Care Services (Medi-Cal) can and will seek reimbursement from the decedent’s assets, including the residence. I have found that Medi-Cal does not negotiate on the amount and only very rarely have I been able to successfully argue for a hardship waiver for the heirs.

 In general, this right of recovery attaches to all assets that transferred by right of survivorship, like joint tenancy, through a living trust (surprised?), assets transferring through a probate, annuities, and other certain types of transfers.  Additionally, even though the Medi-Cal cannot recover from a transfer to a spouse until that spouse has died, they can and will most likely pursue recovery from the heirs after the spouse has died.  I have had clients come to me with a Medi-Cal recovery claim for dad’s benefits that he received years and years ago, but the State of California just recently legally pursued recovery due to mom’s death  (surprised?).

 Part 2 will address some solutions.

This entry was posted on Thursday, November 10th, 2011 at 3:07 pm and is filed under Medi-Cal.