Transferring Title of Home to Avoid Medi-Cal Estate Recovery Can Have Terrible Consequences
Too often seniors have told me that due to their concerns about Medi-Cal estate recovery, they have either transferred title to their home to their adult child, or other non-family member, or added them to title. Under most, if not all circumstances, seniors should avoid this option to protect them from Medi-Cal estate recovery.
Medi-Cal is a joint federal and state program that provides financial assistance for low-income individuals so they can afford medical and long term care. When a Medi-Cal recipient dies, the state may try to recover repayment from the deceased’s estate. It has been my experience that this estate recovery option causes many seniors to be overly concerned about holding onto title of their homes during their lifetimes. Many seniors do not realize that Medi-Cal will not pursue estate recovery until the recipient and surviving spouse (if married) die.
Rarely, if ever, is it wise for seniors to transfer title of their homes or add a child or another personto title to protect the home from estate recovery. Transferring title, or adding another person to title, is difficult and nearly impossible to reverse. If title is transferred, the senior has given up total ownership and control of his or her home. Unfortunately, some seniors who have done this tell me that the child, now on title, has evicted the senior form the residence so that the child can either sell the house or rent it out to tenants. This is obviously a devastating predicament for seniors. Of additional concern, if the child is a co-owner of the property and the child is successfully sued, the property could be subject to a lien by the child’s judgment creditor.
For most seniors their most significant asset, at the time of their death, is their home. If it remains part of their estate when they die, it is subject to Medi-Cal estate recovery. To best protect their home from estate recovery, most seniors would be best served by having a living trust prepared and transfer the home into their trust. It would then not be part of their estate at time of death. Seniors, who own homes and have been Medi-Cal recipients and are concerned about Medi-Cal estate recovery, should discuss a living trust or other appropriate options with an estate planning attorney.
by Attorney Bob Martin