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New legislation help protect assets through estate planning

California estate planners just received a major win in the area of estate recovery for Medi-Cal recipients. SB-833, signed into law by Governor Jerry Brown just a month ago, has removed the state's ability to recover assets from a surviving spouse's estate for those who received Medi-Cal benefits and pass away on or after Jan. 1, 2017.

The new law has removed Medi-Cal beneficiaries' survivors' need to transfer vulnerable assets in order to protect them from seizure. According to the legislation, Medi-Cal will only be able to make recovery seizures against assets that are left in the beneficiary's probate estate. For estate planners, there is a clear possibility for greater protection and efficiency. Beginning on Jan. 1, 2017, assets that are transferred into a living trust before the death of the Medi-Cal beneficiary will be held exempt from Medi-Cal Estate Recovery claims. There are numerous ways an estate planner might effectively shield assets from the probate process, including joint tenancy estates, revocable living trusts or transferring real property through a new transfer on death deed, among others.

SB-833 also grants individuals the ability to file yearly requests for itemized bills of Medi-Cal services used, making it easier to account for which services may be considered for asset recovery upon the death of the beneficiary.

Those who use estate planning in conjunction with Med-Cal services to maximize asset life may find that the guidance of an experienced estate planning attorney can help them sidestep potential setbacks while ensuring that their plan will keep the maximum number of assets safe from probate.

Source: Lake County News, "Estate Planning: Major reform to California's Medi-Cal Estate Recovery," DENNIS FORDHAM, accessed Aug. 04, 2016

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