People who are taking care of their estate plan should ensure that they’re taking steps to protect their assets from Medi-Cal recovery. In the past, anyone who received benefits under this program were subjected to asset recovery. In 2017, Medi-Cal recovery underwent a reform that changed up the rules.
It’s more difficult for the state to recover assets after a Medi-Cal recipient passes away. This enables people to get the care they need and still ensure their loved ones can have financial stability.
Trusts and certain transfers can offer protection
Medi-Cal can only initiate the recovery process on assets that are subject to probate. This means that placing significant assets in trusts can stop them from being part of a Medi-Cal recovery claim. Real estate in joint tenancy or that has a transfer-on-death deed also can’t be claimed by Medi-Cal recovery because it won’t go through probate.
Payable on death accounts, including life insurance and retirement accounts, won’t be claimed. You must ensure that you have a living individual named on these accounts. You can enhance that protection by having a durable power of attorney who has gifting and real estate transfer powers so they can pass your assets along if you’re incapacitated, but they must do this before you pass away because their powers become void when you die.
Permanent barring guidelines are in place
Medi-Cal is forever barred from making a claim against personal property if the person who died is survived by a spouse, domestic partner, or child who isn’t yet 21 years old at the time of the recipient’s death. The child doesn’t have to be named in the estate for the estate to have this protection.
If the Medi-Cal recipient is survived by a domestic partner or spouse who also receives Medi-Cal, the estate could become subject to Medi-Cal recovery when that spouse or domestic partner passes away. The exception to this is if that domestic partner or spouse still has minor children when they die.
Making sure you have your estate plan in order can help your loved ones after you pass away. For those who may need to use Medi-Cal benefits, planning for that possibility as early as possible is beneficial. Working with someone who’s familiar with the applicable laws and your situation may help you to ensure you’re doing everything in a way that offers your estate protection.