San Diego Estate Planning Lawyer Blog
Paying for end-of-life care and final medical expenses can be a major problem for many California residents. California does offer federal Medicaid benefits for poor and disabled residents through the state’s Medi-Cal program. But Medi-Cal has a catch: once a recipient dies, the state is legally obligated (under federal Medicaid rules) to “seek reimbursement” from the person’s estate for any benefits paid.
This means Medi-Cal can go after the property in a deceased beneficiary’s probate estate or living trust. In many cases this includes the decedent’s home. When determining the eligibility of Medi-Cal benefits over the age of 55, the value of a person’s primary residence is excluded from income calculations. But after the beneficiary dies, the house becomes fair game for Medi-Cal officials seeking reimbursement.
However, there are a number of possible exemptions that heirs of a decedent may seek in order to avoid losing assets to a Medi-Cal claim. For example, if enforcing a lien against a property “would result in substantial hardship to other dependents, heirs, or survivors” of the decedent, Medi-Cal must waive its claim. Such “hardship waivers” are not automatically granted. The affected dependent or heir must apply for a waiver, and if it is denied, he or she may seek judicial review.
Medi-Cal Denies Son’s Request for Hardship, Disability Waivers
In a recent case from Los Angeles, a California appeals court affirmed Medi-Cal’s denial of a hardship waiver sought by the son of a 90-year-old woman who died in 2010. Medi-Cal sought reimbursement of approximately $62,000 in medical costs. To that end, Medi-Cal sued the son, who was also co-trustee of his mother’s living trust, seeking to enforce its claim by attaching a lien to the mother’s house, which she had transferred to the trust as part of her estate planning. In response, the son argued he was entitled to a hardship waiver.
A trial court ruled in favor of Medi-Cal. The California Second District Court of Appeal affirmed that decision in a June 24 opinion. The appeals court explained the son simply failed to follow the required administrative procedures for obtaining a hardship waiver.
The court also said the son was not entitled to a separate exemption due to his permanent disability. Medi-Cal may not claim property from an decedent who leaves a “surviving child who is blind or permanently and totally disabled,” as defined by federal Social Security rules. In this case, while the son alleged he was totally disabled, the alleged onset of his disability came after the date that Medi-Cal filed its claim against the mother’s estate. As a result, the Second District said the son could not qualify for a disability exemption.
Get Help From a California Estate Planning Lawyer
The above case is an illustration and not a complete statement of California law on the subject of Medi-Cal exemptions. If you have questions or concerns about how receiving Medi-Cal or other social welfare benefits may affect your will or trust, you should speak with an experienced San Diego estate planning lawyer. Contact the Law Office of Scott C. Soady if you need assistance with any estate planning or probate matter.