Creating an estate plan is about so much more than simply putting your assets in one place or another and deciding who will get the house and the car when you have passed on. Those with few assets may believe that they are not in need of an estate plan, but this could not be further from the truth. Without proper planning and an understanding of both state and federal laws, your loved ones may be in for a rude awakening. One of the most commonly frustrating issues for those who pass away in California is dealing with Medi-Cal recoupment procedures.
The good news is that the laws that govern Medi-Cal, our state-run Medicaid program, are changing on Jan. 1 to reflect adjustments to how much the program can recoup from its subscribers’ survivors — but the risk of an unforeseen expense is still very real. The issue arises around the federal requirement that state Medicaid programs recoup certain costs from their subscribers’ estates upon death. However, this often means that those who are most in need of support services because of their limited assets and income are the very ones whose survivors must deal with the bill from the program — often to the tune of thousands of dollars.
Under the new law, the program will only seek to recover the federal minimums from Medi-Cal users’ estates. This will generally mean that the state will only pursue repayment for things like such as nursing home care and other similar services.
Still, these kinds of costs can be greatly reduced or avoided entirely for those who take the time to create an effective estate plan. Employing the help various estate planning products, it is possible to reduce the ways that government or private parties can collect against your estate. This is exceptionally useful for those who do not have large estates, and want to ensure that the few things they do have can be left to their loved ones instead of swallowed up by the state or private creditors. The guidance of an experienced attorney can help you create the perfect document for your needs and ensure that your rights remain protected.
Source: The Sacramento Bee, “New rules to limit Medi-Cal ‘death fees’,” Emily Bazar, Dec. 23, 2016
