Important Facts About Medi-Cal: Estate Recovery and Liens

Under Medi-Cal law, following the death of the Medi-Cal recipient California must attempt to recover from his or her estate whatever benefits it paid for the recipient’s care. However, no recovery can take place until the death of the recipient’s spouse, or as long as there is a child of the deceased who is under 21 or who is blind or disabled.

While California must attempt to recover funds from the Medi-Cal recipient’s probate estate, meaning property that is held in the beneficiary’s name only, they have the option of seeking recovery against property in which the recipient had an interest but which passes outside of probate. This includes jointly held assets, assets in a living trust, or life estates. California has opted to seek recovery from these sources. Therefore, any property being transfed after death, whether by title, trust or probate will be subject to recovery by Medi-Cal. Given the rules for Medi-Cal eligibility, the only probate property of substantial value that a Medi-Cal recipient is likely to own at death is his or her home.

Here in California, the transfer of the home does not cause the imposition of a disqualification period. However, the sale of the home could result in the loss of benefits, if the proceeds of the sale exceeded the amount of non-exempt assets that can be retained by the Medi-Cal reciepient and his or her spouse. Further, the proceeds, if given away, could create a period of ineligibility that under present law could be as long as 36 months.