Today’s Article deals with an unknown and potentially very costly risk for Estate or Trust administrators: the obligations for Medi-Cal notice and repayment.

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By Steve Beede, BPE Law Founder

In California, we have a public health insurance program which provides needed health care services for low-income individuals including families with children, seniors, persons with disabilities, foster care, pregnant women, and low income people with specific diseases such as tuberculosis, breast cancer or HIV/AIDS. This program is called Medi-Cal. Medi-Cal is financed equally by the State and federal government through the federal Medicaid program.

Many Californian may own a home but not have sufficient actual income to pay for their health care. Under our law, Medi-Cal will actually pay for the health care for such a person without forcing them to sell their home to pay for their care. However, under such situations, the State has a claim against that person’s assets – including their home equity – which is payable from their Estate when the person dies. This claim process is called “Estate Recovery”.

What is Estate Recovery?
The Medi-Cal program must seek repayment from the estates of certain deceased Medi-Cal members. Repayment only applies to benefits received by these members on or after their 55th birthday and who own assets at the time of death. If a deceased member owns nothing when they die, nothing will be owed. Effective January 1, 2017, repayment will be limited only to estate assets subject to probate that were owned by the deceased member at the time of death. Repayment will be limited to payments made, including managed care premiums paid, for nursing facility services, home and community based services, and related hospital and prescription drug services received when the member was an inpatient in a nursing facility or received home and community based services. For Medi-Cal members who died prior to January 1, 2017, repayment will be sought from all assets owned by the deceased member at the time of death.


Submitting Notice of Death
If you are the person handling the affairs of the deceased Medi-Cal member, you must provide Notice of Death” to the Director of the California Department of Health Care Services (“DHCS”) within 90 days of the date of death with a copy of the death certificate. If Medi-Cal believes money is owed to them, they will send a notice of Claim. Despite this Notice being legally required, many people handling a loved one’s estate may be unaware of this. If a Probate proceeding is used, the California Probate law requires that the Notice be given and that any resultant claim be satisfied before any estate proceeds can be distributed to legal heirs. However, in private proceedings such as Trust administration that are not supervised by the Probate Court, the Notice is often neglected by unaware Successor Trustees. But, ignorance of the law is no excuse.

Claim for Wrongful Distribution
If distributions of Estate assets are made to legal heirs and/or beneficiaries without first satisfying any claim owed to DHCS, Medi-Cal has a claim against both the Estate Administrator as well as any persons receiving the Assets. Medi-Cal can them force these persons to give back the funds or otherwise satisfy the DHCS Claim.

Specific limitations or exemptions may apply. DHCS may waive its claim if payment of the claim would cause a substantial hardship. Any request for a substantial hardship waiver must be submitted to DHCS within 60 days of the date on the DHCS Estate Recovery claim letter.

For over 20 years, the attorneys of BPE Law Group, P.C. have been assisting our clients and their families with estate planning and administration including Wills, Trusts, Probate, and other proceedings. We can provide the necessary legal forms and guidance needed to determine any possible claims against the estate assets and to negotiate the best possible resolution. If you have questions concerning estate planning or administration, or any other legal matter, give us a call at (916) 966-2260 to schedule a Consultation with one of our experienced attorneys. If you have an immediate question on this topic, please email Keith Dunnagan at

This article is not intended to be legal advice, lending advice, or a specific recommendation of any particular lender or company, and should not be taken as such advice.