Medi-Cal Benefits Trusts
and Avoiding Recovery Claims After Death

What’s the distinction between Medi-Cal and Medicare?
Do not confuse Medicare and Medi-Cal; the programs are very different.
Medi-Cal is needs-based. Medicare is not.
Nursing home payments differ dramatically: Medi-Cal has no limit. Medicare has limited nursing home benefits.

What are the bases for Medi-Cal eligibility?
The two main categories of eligibility: (1) SSI recipient; and (2) medically needy.

What are exempt assets for purposes of qualifying for Medi-Cal?
• House
• Household goods
• Pre-paid burial plan
• One car

Available assets?
• Cash
• Bank accounts
• Mutual funds
• Stocks
• Bonds
• Most annuities
• Notes

Is the Medi-Cal beneficiary’s home exempt?
Yes, for purposes of eligibility. No, in terms of recovery claims. In other words, the residence is exempt during life, but loses its exemption at death. Please watch the video on this page. (Certain exceptions exist.)

What is the essence of Medi-Cal planning?
Divesting before death.

What else besides my home can the state claim against?
Your estate. “Estate” is anything you own. It’s real or personal property which the individual had any legal title or interest at the time of death (to the extent of such interest), including assets conveyed through joint tenancy, tenancy in common, survivorship, life estate, living trust or other arrangement.

The State can also recovery from annuities purchased by a beneficiary on or after September 1, 2004, regardless of whether the remainder interest in the annuity is a lump sum or a stream of income.

What is the “look-back” period?
This is a period of time during which a Medi-Cal beneficiary may be penalized for making big gifts. If a person transfers property for less than fair market value on or after a “look-back” date, the person is ineligible for nursing home Medi-Cal benefits for a certain period.

How long is the look-back period?
60 months.

Is a living trust a useful planning tool for Medi-Cal recipients?
No.Living trusts can disqualify their settlors from Medi-Cal eligibility for nursing home care. Often, revoking a revocable trust is the first step to prudent Medi-Cal planning.

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