Medi-Cal Estate Recovery: What Families Should Know

After a Medi-Cal recipient who received long-term care passes away, California can seek reimbursement from their estate. This is exactly the kind of planning where a properly funded trust or other legal structure, set up well before a Medi-Cal application, can make a real difference — talk to an elder-law attorney before assuming your home is protected.

What estate recovery is

After a Medi-Cal long-term-care recipient dies, California’s Department of Health Care Services (DHCS) can seek reimbursement from the deceased person’s estate for certain services received at age 55 or older — primarily nursing facility and home- and community-based waiver services, along with related hospital and prescription costs.

Only the probate estate is at risk

Since a 2017 law change (SB 33 / SB 833), California only recovers what federal law requires, and limits recovery to the probate estate only — not a broader “expanded estate.” That means assets that pass outside probate — a properly funded living trust, joint tenancy property, transfer-on-death deeds, beneficiary-designated accounts — are generally not reachable by an estate recovery claim.

Your trust has to actually be funded, not just signed. This protection only works if the asset actually avoided probate in practice. A home that was supposed to go into a living trust, but was never actually deeded into it, is still a probate asset — and still exposed.

When there’s no recovery at all

No recovery is permitted if the deceased is survived by a spouse or registered domestic partner, a child under 21, or a blind or disabled child of any age. Beyond that:

A discretionary hardship waiver exists, but it must be requested within 60 days of the claim notice.
A mandatory waiver applies for a “homestead of modest value” — a home worth 50% or less of the county’s average home price at the date of death.

A change that’s coming, but isn’t here yet

California currently has no cap on home equity for Medi-Cal eligibility purposes. That’s changing: a federal law (H.R. 1, the 2025 reconciliation act) requires states to implement a $1,000,000 home equity cap by October 1, 2028. This is coming, but is not yet in effect — worth tracking if you’re planning several years out.

Two separate questions: exempt now vs. protected later

A home is generally exempt from Medi-Cal’s eligibility asset count while the Medi-Cal recipient is alive, based on their intent to return — no proof of actual ability to return is required (Welfare & Institutions Code §14006(b)). But this is a separate question from whether the home is protected from estate recovery after death. Being exempt during life does not automatically protect the home later — if it’s still a probate asset at death, it can still be reached.

Where this comes from

This page is based on Welfare & Institutions Code §14009.5, corroborated by DHCS’s own Estate Recovery Program page and CANHR Fact Sheet #45.