MEDI-CAL PLANNING AND CLAWBACK
A very large concern for many people in California is the ability of Medi-Cal to lien and/or collects their assets after death.
ASSETS IN DECEDENT'S TRUST WILL, AS OF JANUARY 1, 2017, AVOID PROBATE AND MEDI-CAL RECOVERYA very large concern for many people in California is the ability of Medi-Cal to lien and/or collects their assets after death.
While the formation of a living trust was effective to avoid probate, prior to January 1, 2017, it did not offer any protection against Medi-Cal's ability to seek reimbursement from your assets for the amount of benefits Medi-Cal paid for the medical or long-term care costs they paid during your or your spouse's life.
This recovery mechanism was criticized for its devastating effect on families of recipients who were forced to sell a family home to pay for Medi-Cal benefits received by family members.
ON JUNE 27, 2016, GOVERNOR BROWN SIGNED SB833, EFFECTIVE JANUARY 1, 2017As of January 1, 2017, California SB833 changed this devastating result. SB833 significantly changes Medi-Cal estate recovery laws beginning January 1, 2017. With the new rules, more families will not be forced between choosing health care through Medi-Cal, and losing their life savings. The new law will be found at Welfare and Institutions Code 14009.5.
Under SB833, as of January 1, 2017, Medi-Cal cannot make a claim against the estate of a decedent or against any recipient of the property of that decedent by distribution or survival if assets are in a living trust. The new law essentially limits estate recovery to the bare minimum required by federal law and will apply to Medi-Cal recipients who die after Jan. 1, 2017.
Since assets held in a decedent's living trust will, as of January 1, 2017, avoid both probate and Medi-Cal recovery and, as a result, preserve your estate for your loved ones - it is now, more than ever, important to plan for your loved ones by establishing a living trust.