Medi-Cal Estate Recovery

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Watch Out For Medi-Cal Recovery

Qualifying for Medi-Cal is Only the First Step in Your Medi-Cal Planning

Many seniors who may soon need long-term care worry about how to afford the extraordinary costs. For example, the average semi-private room in a California nursing home costs $86,815 per year.


One of the smartest moves a senior can make is to work with an elder law attorney to position their assets for quick and easy Medi-Cal qualification when the time for long-term care arrives. Medi-Cal is an insurance program jointly financed by the state of California and the federal government to cover nursing home care costs and certain other long-term care expenses for seniors that meet certain qualification standards.

Medi-Cal qualification is an important tool when it comes to protecting your estate and your legacy for the next generation. However, it is only one step in a larger and more complex long-term care plan.

Medi-Cal is a No-Interest Loan

What many seniors may not realize is that the money Medi-Cal provides to cover nursing home care costs is not free. When the senior passes away, the state of California will attempt to “recover” the expenditures it made on behalf of that individual. In other words, all those Medi-Cal payments are like a no-interest loan. One day, California may come knocking with the intent to collect.

Unfortunately for seniors living in the Golden State, California has been one of the most aggressive states when it comes to Medicaid recovery. Some states will only collect against a senior’s probate estate or will not seek any recovery if a covered senior has a surviving spouse. California has used the most expanded definition of estate in its recovery efforts. Additionally, although California will not seek recovery while a surviving spouse is alive, it still retains the right of recovery after the surviving spouse passes away.

What Does California Recover?

California is an extremely populous state, and it does not make sense for it to try to recover your old books, socks, and furniture. In most cases, California will ignore all but the most valuable possessions when it seeks to recover its Medi-Cal expenditures. The most vulnerable asset is your home. If a senior is still in possession of their home when they pass away, California will almost certainly try to recover their costs against the value of the home.

How to Avoid Recovery

After all the work and effort that went into qualifying for Medi-Cal, you don’t want to give up now and let California take away your home after you are gone. For many seniors, their home represents their greatest asset. They may want to pass their home onto their children or sell it and give the proceeds to their family members or a special nonprofit. It is possible to avoid Medi-Cal recovery. The key is to ensure that your home and other valuables are not in your possession at the time of your death.

Your elder law attorney can help you craft a Medi-Cal Asset Protection Trust that will allow you to retain control over your estate while still moving it out of your possession. With a Medi-Cal Asset Protection Trust, you can legally avoid Medi-Cal Recovery and keep your financial legacy intact for your family after you are gone. You can also successfully bequeath your home to your children or grandchildren while helping them avoid a costly capital gains tax. Contact the Law Office of Justin M. Gilbert today to discuss Medi-Cal Planning.