Cite as E074949
Filed January 10, 2022, Fourth District, Div. Two
By Michelle Barnett Batista
Aaron, Riechert, Carpol & Riffle, APC
Headnote: Medi-Cal Reimbursement – Revocable Trusts
Summary: Under prior law applicable to persons who died before January 1, 2017, property held by a decedent and transferred to heirs through a revocable trust was subject to reimbursement for Medi-Cal benefits.
Joseph created a revocable trust naming his niece as the sole beneficiary. For three years prior to his death, Joseph received Medi-Cal benefits. During that period, the California Department of Health Care Services (“department”) paid $480,465.52 for Joseph’s health care services. Following Joseph’s death in 2016, the department submitted a creditor’s claim to the public guardian, who served as both conservator of Joseph’s estate and trustee of Joseph’s trust. The public guardian requested authority to pay the department’s claim from the trust. The probate court denied the public guardian’s request and ordered the assets distributed to the trust’s sole beneficiary.
The appellate court reversed and remanded. Before it was amended in 2016, California law governing revocable inter vivos trusts required that the department be reimbursed from the trust before any distribution to the trust’s beneficiary. California had elected to utilize a part of the federal definition of “estate” that included assets conveyed to an heir through a living trust. California law was amended in 2016 to exclude from Medi-Cal recovery trusts of persons who died on or after January 1, 2017. However, since Joseph died in 2016, the prior law applied to his trust and subjected it to Medi-Cal reimbursement.