What Property is Exempt From an Estate Recovery Claim?
The general rule is that the state of California through its Department of Health Care Services, Recovery Unit, may seek recovery or reimbursement of Medi-Cal benefits paid, from the estate of a deceased Medi-Cal recipient.
But, for Medi-Cal recipients who die on or after January 1, 2017, the following property is exempt from an estate recovery claim:
• Property transferred prior to death and is no longer in the Medi-Cal recipient's name.
• Property not subject to probate, e.g., the property is held in living trusts, joint tenancies, subject to the right of survivorship or life estates.
• A residence of modest value: a home whose fair market value is 50% or less of the average price of homes in the county where the homestead is located, as of the date of the decedent’s death.
• Life insurance: If you name one or more beneficiaries on your life insurance policy.*
• Retirement accounts (e.g., IRAs, 401k's): If you name one or more beneficiaries on your retirement account(s).*
* Unless the estate is the named beneficiary or it reverts to the estate of the Medi-Cal recipient because there is no valid beneficiary designation on file with the company.