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I went with “Living Trusts” in the title as that is the common nomenclature for revocable trusts but note that all inter vivos trusts (including the irrevocable ones heretofore necessary to avoid Medi-Cal recovery) are “living” (inter vivos means created during life) and the amazing thing here (amazing because something good came out of Sacramento) is that even revocable trusts (which obviously must be “living”) will do the trick.

Excerpt from article by a WealthCounsel colleague up north:

Under the new law, Medi-Cal’s right of recovery will only apply to assets which pass from the beneficiary to others by probate or by a probate summary procedure.  By way of example, assets held in the individual’s own name, alone, and designed to pass by Last Will, would typically be subject to probate and would still be exposed to recovery.  However, assets held in a Living Trust will soon be immune from recovery, as the trust is designed to pass ownership upon death without a probate.  Likewise, assets held in Joint Tenancy form or in Pay On Death (“POD”) form will also usually be immune from recovery, as they are likewise designed to pass ownership to the survivors without probate.The new law will only be effective for individuals dying after January 1, 2017.  Thereafter, it should be relatively easy to avoid Medi-Cal recovery by merely holding assets in a format which avoids probate, such as in a Living Trust or in Joint Tenancy or POD account formats.  Indeed, given the prevalence of Living Trusts, and the use of these beneficiary-type accounts, it may soon be the rare family that experiences Medi-Cal recovery after the death of a loved one. Caution:  the new law does not expressly address whether the new Transfer on Death Deed will also be immune from recovery.

Source: New Law: Medi-Cal To Dramatically Scale Back Estate Recovery – Lawyer For Seniors


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David R. Duringer, JD, LL.M, is a concealed firearm instructor and tax lawyer specializing in business and estate planning; licensed to practice law in the states of California and Washington. He is managing shareholder at Protective Law Corporation, serving Southern California from its Laguna Hills (Orange County) headquarters and satellite offices in San Diego County (Coronado and Carlsbad).

© Protective Law Corporation as per date of publication captioned above. All rights reserved unless otherwise noted. Sharing encouraged with attribution and/or link to this page.



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