The Problem
What happens to your parents' home when Medi-Cal pays for their care.
There is a significant drawback to keeping a home as an exempt asset for Medi-Cal purposes. If a Medi-Cal recipient owns a home at the time of their death — and the home is still in their name — the California Department of Health Services (DHCS) will likely make a claim for reimbursement against the estate. This claim may be satisfied from the proceeds of the home's sale, or in some cases converted to a lien against the property.
In practical terms: your elderly parent qualifies for Medi-Cal, receives long-term care benefits, then passes away — and the state recovers those costs from the sale of the family home. The children receive what's left, if anything.
The Medi-Cal trust solution
A properly structured Medi-Cal trust (also called an asset protection trust in this context) removes the home from the Medi-Cal recipient's name in a way that protects it from DHCS liens, while preserving their eligibility for Medi-Cal benefits. This allows your parent to receive the care they need without sacrificing the family home and the inheritance your family worked decades to build.
A home may be transferred to someone else without incurring a transfer penalty — so long as the home is exempt at the time of transfer and the transfer is done correctly and in time.
Why adult children should act now — not later
Medi-Cal planning is one of the most time-sensitive areas of estate planning. Regulations are complex, the look-back period catches many families off guard, and new regulations from the state can change the window of opportunity. Many families only discover the problem after a parent has already passed and the state files its recovery claim.
If your parents are in their 60s or 70s and own a home, the best time to explore Medi-Cal planning is now — before any long-term care need arises. This is an act of financial protection for the entire family.
Who needs Medi-Cal planning?
- Adult children whose parents own a home and are approaching retirement age
- Families whose elderly parents are in early-stage dementia or declining health
- Anyone whose parent is already receiving Medi-Cal and the home is still in their name
- Families who inherited a home from a Medi-Cal recipient and received a state recovery notice
Call us — this is too important to delay
Please call us at 818-714-1789 to schedule an appointment to safely transfer your parent's home to preserve the family inheritance and avoid transfer penalties. The regulations in this area are complex and changing — this is not a situation to navigate without experienced legal guidance.