Dear Len & Rosie,
My mother passed away a year ago. She had received Medi-Cal for the last three years of her life while living in a nursing home. The state has not contacted us yet about reimbursement, but we expect they may. We have an IRA worth $10,000 and a small savings account worth another $10,000 in her name and my name.
How long does Medi-Cal have to come back to us looking for her assets? Do I have to keep the money in her accounts and wait for them, or can I disperse them to her surviving children? Or can I “hide” the money somewhere else?
We are glad that you wrote. Most people do not understand how Medi-Cal recovery works. You are obligated to notify the California Department of Health Care Services (DHCS) and provide them with a copy of her Certificate of Death within 90 days of your mother’s death at this address:
Department of Health Care Services
Estate Recovery Unit, MS 4720
P.O. Box 997425
Sacramento, CA 95899-7425
Don’t waste twenty bucks - send them a photocopy of the Certificate of Death instead of a certified copy. And don’t bother trying to hide. DHCS is very good at sending out estate claim letters even when they are not properly notified of a recipient’s death.
Almost anything your mother owned on her death is subject to the estate claim, but the IRA is not. It is very important to know that retirement accounts and any life insurance policies owned by her that pay out directly to beneficiaries are not subject to the DHCS estate claim. They are subject to the claim only if they have no beneficiaries and pay into your mother’s probate estate. Also, if your mother was survived by a minor, blind, or disabled child, there is no estate claim, even if that child doesn’t actually inherit anything. Also, there’s no claim on benefits paid on her behalf outside of a nursing home before her 55th birthday.
In this case, DHCS likely has a claim against your mother’s $10,000 savings account. They are entitled to this money but only after her funeral and burial or cremation expenses and expenses of administration are paid first.
One last thing - normally your mother couldn’t have more than $2,000 and be on Medi-Cal benefits (the IRA doesn’t count) The fact that she has $10,000 in the bank and was still on Medi-Cal is an anomaly, but it probably won’t change things.
Finally, understand that if your mother owned a home on her death, it’s more likely than not you’ll have to pay the DHCS estate claim in full. However, for those readers who are on Medi-Cal or have loved ones on Medi-Cal, it’s possible to shelter their homes from estate recovery claims by transferring property to an irrevocable trust, but only if you act now, while the recipient is still living.
Len & Rosie
Dear Len & Rosie,