Will Medi-Cal Collect After Death?

question mark on sticky noteMedi-Cal is one of the best options available for seniors in the San Fernando Valley who need help paying for long-term care. Medi-Cal is a needs-based program, meaning that strict asset limits are required for eligibility and severe and seniors can face penalties severe penalties if they gift assets as well. There are some exceptions for assets that remain uncountable for Medi-Cal purposes, including a house or a car. However, after the senior passes away, Federal law instructs that the state of California must try to collect on the costs the program paid out from the senior’s estate.  (The state does not use liens)

Estate Asset Recovery

In order to collect from a Medi-Cal beneficiary’s estate, the state must submit a claim to the probate court for any expenses owed by the estate. However, there has recently been some confusion as to what the state can collect, since California changed the laws regarding recovery from Medi-Cal beneficiaries’ estates this past year. Prior to January 1, 2017, the state could seek recovery payments from all assets owned by a decedent at the time of their death. Those assets included all solely-held and jointly-held assets, as well as any assets that the decedent had an interest in but did not pass through the probate estate. This list includes any jointly-owned bank accounts and real estate, and anything that may have been held in a Trust. However, for any Medi-Cal beneficiaries that die after January 1, 2017, the state may only collect on probate assets, which are typically any assets that were solely-held by the decedent without any living beneficiary at the time of death.

Real Estate Lien

Contrary to belief, the state of California usually cannot place a lien on your property.   After death if the successor can demonstrate unwillingness to sell or inability to obtain financing to pay off the debt, a voluntary lien may be sought in lieu of immediate payment.  When the property is sold, the state will collect whatever is owed to them by the estate just the same as a mortgage would be paid off, or how a tax lien would be satisfied.

There are circumstances when the state cannot recover the costs of Medi-Cal care. These are typically when there is a surviving spouse, a disabled or minor child, or a sibling or child caregiver who provided care for a certain amount of time before the beneficiary was moved to a long-term care facility.

If you would like to learn more about the Medi-Cal process, or if you’d like to discuss your options for Medi-Cal planning for yourself or a loved one, please set up an appointment at our San Fernando Valley elder law office by calling (818) 905-6088.

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