An important, but frequently overlooked, aspect in Medi-Cal long term care (LTC) benefit planning is Medi-Cal Estate Recovery.
The Medi-Cal laws requre that the state pursue recovery from a Medi-Cal LTC beneficiary’s estate following death for the benefits obtained during his or her lifetime. These benefits have often been accruing at thousands of dollars a month. In cases of extended periods of care, recovery claims can be hundreds of thousands of dollars.
In situations involving a married couple, Medi-Cal defers recovery efforts until the death of the surviving spouse.
How will Med-Cal know when someone dies? California law requires that the legal representative of a deceased person’s estate (e.g., trustee, executor) so notify the Medi-Cal’s Estate Recovery Unit within 90 days of death. In response to this notice, Medi-Cal will determine whether or not Medi-Cal LTC benefits were paid and will demand repayment from the estate up to the amount of benefits paid.
A favorite target for Medi-Cal recovery is the family home because it is typically the most valuable asset in one’s estate.
Is there anything that can be done to reduce or eliminate the possibility of Medi-Cal recovery? Yes, there are numerous strategies available to accomplish that goal. To better understand the options in this area, consult with an experienced, qualified elder law attorney who regularly works in the Medi-Cal planning field.
With good planning, the home and other assets can be protected and other unwanted consequences such as increased taxes can be avoided. It is critical that this planning be addressed long before the death of the Medi-Cal patient as certain planning options may be lost once a person loses mental capacity or dies.
Post-death planning options are very limited and are typically restricted to meeting the hard-to-meet Medi-Cal hardship rules.
As noted in the earlier blogs in this series, due to the complex and ever-changing rules and regulations in the area of Medi-Cal LTC benefits, do NOT rely upon the advice of non-attorney so-called ”experts’, because their education, training and experience will not be sufficient to properly advise you on how best to get your loved one the care they need while maximizing the protection of their hard earned assets.
- The SECURE Act – the Gift That Keeps On Giving - September 27, 2023
- Understanding the Importance of the Simultaneous Death Act - September 25, 2023
- IRS Confirms Grantor Trust Status Alone Does Not Cause a Step-Up in Basis - September 23, 2023