Effective January 1, 2017 there is a new law on Medi-Cal and Your Home. This new law SB 833 essentially rules out Medi-Cal from seizing a decedent’s assets including their home to recoup money spent on healthcare in the last years of their life. The new law is effective for those who die on or after January 1, 2017 and will enable Medi-Cal recipients to leave their homes to their children without having to pay the State back on their death.
Medi-Cal will only be able to come after those assets in a Medi-Cal recipient's “probate estate". Thus, if a homeowner is using Medi-Cal, then all they have to do is: avoid probate. A homeowner avoids probate by transferring the title of their home into a Living Trust via a "trust transfer deed." Any home or assets transferred into a living trust prior to the Medi-Cal recipient passing on after January 1, 2017 will be protected from Medi-Cal recovery. The same is true for assets held in joint tenancy or life estate because these transfer automatically at death without the need for a probate, thereby escaping Medi-Cal recovery as well. Conversely, a Will ends up in probate which means the assets in the Will are not protected from Medi-Cal recovery.
Transferring a home into a living trust is now even more important for Medi-Cal recipients in order to protect and preserve their homes for their heirs. This new law on Medi-Cal and Your Home is very significant and can easily be eliminated by having a Living Trust
Source: Taken in part from the article, “New Law! Medi-Cal Cannot Touch Your Home” by Paul Horn, dated Aug. 6, 2016. For legal advice always consult a qualified attorney.
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