Protecting Your Estate From California MediCal Claims

MediCal is one of California’s biggest social welfare programs, serving low-income individuals all across the state. Almost 32 percent of California’s population is enrolled in the program. Many of MediCal participants are those in the later years of their life. With people living longer, funds for their retirement are often stretched thin. When it comes time to pay for costly healthcare options, MediCal is the only option available.

Like its federal counterpart, Medicaid, MediCal seeks to decrease the costs spent on participants in the program by recovering against the estates’ of deceased participants. MediCal’s Estate Recovery program also authorizes MediCal to go after the estate of the surviving spouse of a deceased MediCal participant. This may serve an important purpose to reduce the overall cost of the program and the important role it performs but it also hurts those who already have diminished assets and financial security.

Changes to MediCal Estate Recovery Claims

Thankfully, change is on the horizon beginning in 2017. Earlier this year, the California legislature passed Senate Bill 833, which drastically limits and reduces the scope of California’s MediCal Estate Recovery. The changes to the recovery program do not allow the program to proceed against the surviving spouse’s estate and limits the recovery against the participant’s estate to only assets in the probate estate.

Since the new legislation limits the recovery to only those assets found in the participant’s probate estate, the easiest way to protect a person’s assets is to take assets out of the probate estate. Assets that are not in the MediCal participant’s probate estate at the time of their death are effectively safe from MediCal Estate Recovery claims.

Removing Assets from the Probate Estate

There are many ways to remove assets from the probate estate, such as:

  • Holding assets jointly with rights of survivorship;
  • Attaching transfer on death clauses to real estate and automobiles; and
  • Transferring assets through beneficiary designations.

One of the most common and versatile ways that people remove assets from the probate estate is to transfer their assets into what is commonly referred to as a revocable living trust. Revocable living trusts have many uses beyond just taking assets out of the probate estate. Revocable living trusts allow for assets to pass more quickly than they would otherwise through the probate process. In addition, your assets may have requirements attached to them before they pass to your beneficiaries and only when certain requirements are met. With the added benefit of MediCal claim protections, there are even more reasons than ever to consider a revocable living trust.

Considering a Revocable Living Trust? Plan Your Estate with a Licensed California Attorney

Do not attempt to put together a revocable living trust on your own or put together your own estate plan. Your estate plan plays a key role during the most crucial and important moments of your life. Many estate plans have failed due to careless errors. If you are looking for guidance to planning your estate, consult the Law Office of Charles D. Stark in Sonoma County, California. With decades of experience, he can address your concerns and needs. Contact the Law Office of Charles D. Stark today to schedule an appointment, 707.527.9900.

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