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Protect your home from Medi-Cal recovery

Posted by Michael Guzman | Jan 10, 2020 | 0 Comments

When you get older, you might have additional medical expenses that you don't have now (i.e., a home healthcare provider or assisted living). If you qualify, you can get assistance with these expenses through Medi-Cal, California's Medicaid program. However, some people are worried about what will happen to their homes if they receive Medi-Cal benefits.

What happens to my house?

Your home is exempt from the determination of your Medi-Cal eligibility. However, after you die, Medi-Cal, through the Estate Recovery Program, may seek repayment of expenses by making a claim against the property in your estate.

Is there a way to avoid this?

Yes. One way to avoid this is to execute a revocable living trust and transfer your home to the trust. This benefit has only been available for a couple years, due to a change in the law, but it is hugely helpful to Medi-Cal recipients.

Because Medi-Cal can only collect against your probate estate, assets that avoid probate are not subject to recovery. Because assets in a living trust avoid probate, your house is safe for your beneficiaries.

Should I wait until I'm on Medi-Cal to draft a living trust?

No, you should not wait. Protection from Medi-Cal recovery is only one benefit to having a living trust. If you die before you draft a trust, your estate will still have to go through probate. Medi-Cal recovery aside, probate is still a costly hassle for your heirs.

Additionally, if you wait until you are receiving Medi-Cal benefits, you may no longer have sufficient mental and legal capacity to execute valid trust documents. You should execute a living trust while you are still capable of making your own decisions. If you lose capacity, a conservatorship will be required to manage your assets.

A living trust has many benefits: keeping your estate out of probate, avoiding the need for a conservatorship, and providing for an orderly distribution of your estate. And now, with the change in the law, a living trust can prevent Medi-Cal recovery from taking your home from your heirs.

Helix Law Firm can draft a living trust for you

If you would like to set up a living trust, we can help. A revocable living trust is one part of an overall estate plan, which also includes a pour-over will, durable power of attorney, and advance healthcare directive.

If you're interested in learning more, please call us at (619) 567-4447 to schedule a free consultation.

About the Author

Michael Guzman

Michael Guzman is a Paralegal at Helix Law Firm. He helps to maintain Helix Law Firm's extraordinary quality of customer service, and assists in the intake of new clients and in communicating with existing clients and vendors. Michael attended the University of San Diego and is a proud Torero.

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