The recent implementation of California SB 833 and the reform of Medi-Cal estate recovery will have a significant impact on estate planning for many Californians. The new law essentially limits the ability of Medi-Cal to pursue the estate of a deceased patient in order to recover costs of their treatment.  Under the new law, Medi-Cal is only able to pursue assets available in the deceased patient’s “probate estate” for those who pass away on or after January 1, 2017.  How does this remarkable law affect estate planning for California citizens, and why is a revocable trust the best option to protect assets if you receive Medi-Cal services, or were permanently under nursing home or professional care?

Right now, and until January 1, 2017 Medical will be able to pursue the estate of the surviving spouse of qualifying Medi-Cal patients if the surviving spouse received assets from the Medi-Cal recipient’s estate at the time of their passing.  For those who pass on or after January 1, 2017 the relief for unpaid Medi-Cal expenses will be limited to the decedent’s probated estate.  In other words, Californians who expect to receive Medi-Cal benefits (and anyone who owns a home) would do best to consider a revocable trust and other legal vehicles that avoid the probate process altogether.  If your assets pass to beneficiaries outside of probate, as they do in a revocable trust, Medi-Cal would not be eligible for any estate recovery.

In simpler terms, any asset transferred to a revocable trust prior to a patient’s passing on or after January 1, 2017 will be protected from Medi-Cal estate recovery.  Medi-Cal will not be able to come after your surviving spouse or beneficiaries to recover unpaid portions of your care.  Avoiding probate makes sound sense for any Californian.  Probate is a process that adds substantial costs, and delays the disposition of your assets for a year or more.  It is a complex and slow process.

The experienced estate planning attorneys at Allen Barron will help you to simplify your life, protect your assets and preserve more of your wealth for the benefit of a surviving spouse or your heirs and beneficiaries.  We invite you to call 866-631-3470 for a free consultation and learn about the substantial advantages a revocable trust may provide in light of the reform of Medi-Cal estate recovery under SB 833.


Contact an Estate Planning, Business Law Or Tax Attorney Today

To set up a free, no-obligation consultation with one of our knowledgeable San Diego based estate planning, business and tax lawyers, or learn more about our tax preparation, accounting and business advisory services call us at 866-631-3470 or contact us.