California Department of Health Care Services Get Reimbursement from a Decedent’s Revocable Trust for Medi-Cal Benefits Paid

California Department of Health Care Services Get Reimbursement from a Decedent’s Revocable Trust for Medi-Cal Benefits Paid

A California appellate court recently held that the Department of Health Care Services (“DHCS”) may recover reimbursement from a decedent’s revocable trust for Medi-Cal benefits paid.  In Riverside County Public Guardian v. Snukst, the Deceased had created a revocable trust and named his niece as sole beneficiary.  Prior to his death, the Deceased received Medi-Cal benefits totaling approximately $480,000, which the DHCS sought to recover after he passed in 2016.  DHCS filed a creditor’s claim, which the public guardian sought approval to pay from Decedent’s trust.  The probate court denied approval, ordering the trust assets paid to Decedent’s niece.  DHCS appealed.

The appellate court reversed, holding that public policy requires a broad definition of the term “estate” when considering the issue of reimbursement for Medi-Cal benefits paid, and thus “estate” is meant to include all assets in which the recipient of those benefits may have an interest, including assets placed in a revocable trust.  Medi-Cal recipients with assets being held in a revocable trust, as well as the beneficiaries of the trust, should now take notice that the assets of the trust may be reached by the DHCS and consider alternative estate planning strategies to account for this.

Epps & Coulson, LLP has experienced attorneys who have represented many clients in estate planning, trust and probate matters.  If you have any questions or need to engage legal counsel in connection with your estate plan or probate case, please contact Dawn at dcoulson@eppscoulson.com or Adam at anicolai@eppscoulson.com.

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