Medi-Cal Recovery Against a Trust in California

If a parent or spouse received Medi-Cal benefits for nursing home care or certain other long-term services, the state can file a claim against their estate after death to recover those costs. This is one of the most misunderstood areas of Medi-Cal planning, because many families assume a revocable trust does nothing to protect against this claim. Since 2017, that’s no longer true. California law limits Medi-Cal estate recovery to the probate estate, so assets already held in a fully funded revocable trust generally fall outside its reach.

What Medi-Cal estate recovery actually covers

California’s Medi-Cal estate recovery program allows the Department of Health Care Services (DHCS) to file a claim against a deceased Medi-Cal recipient’s estate for the cost of certain benefits paid, generally nursing facility services, home and community-based services, and related hospital and prescription drug costs, for recipients age 55 or older at the time services were received (Welfare and Institutions Code § 14009.5).

Since SB 833 took effect for deaths on or after January 1, 2017, that claim reaches only the probate estate, meaning assets subject to administration through the probate court. Assets that never pass through probate, because they’re already titled in a fully funded revocable living trust, are outside DHCS’s reach. The trust structure that avoids probate court also avoids the recovery claim, as long as the trust was actually funded before the recipient’s death.

Why a funded revocable trust generally protects against recovery

A revocable trust doesn’t create the kind of protection that shields assets from ordinary creditors during the settlor’s life. Because the recipient can revoke the trust and reclaim its assets at any time, a private creditor can generally still reach those assets under Probate Code § 18200. Medi-Cal estate recovery works differently. It isn’t a creditor claim against the trust itself, it’s a claim against the deceased recipient’s probate estate, and a properly funded trust leaves no probate estate for the state to reach. Our article on creditor claims against a trust in California covers the § 18200 exposure that still applies during life and for other creditors; Medi-Cal recovery is the one major exception where trust funding still does real work after death.

The house is usually the biggest issue

For most families, the family home is the asset at stake, and it’s also the clearest example of how trust funding changes the outcome. A home still titled in the decedent’s individual name at death is part of the probate estate and generally subject to recovery, subject to specific exemptions and hardship waivers for a surviving spouse, minor child, or disabled child, and for certain low-income heirs. A home already retitled into a fully funded revocable trust before death isn’t part of the probate estate, and DHCS generally can’t reach it through an estate recovery claim. The exemptions and waivers still matter for anyone whose home didn’t make it into the trust before death; they’re fact-specific, require an affirmative application, and don’t apply automatically just because a family needs the home to live in or can’t afford to lose it.

Timing and notice

DHCS generally has a limited window after death to file a claim, and California law requires the trustee to give DHCS notice when winding down a trust if the settlor received Medi-Cal benefits, even where the recovery claim itself is ultimately limited to whatever probate estate exists. This overlaps with, but is separate from, the general creditor notice process trustees use for private debts. Our guide on notice to creditors for a trust in California explains the private-creditor notice mechanics; a Medi-Cal claim runs on its own statutory track and shouldn’t be assumed to be covered by a general notice letter.

Trustees who distribute trust assets without accounting for a known Medi-Cal recovery exposure can face the same personal liability risk that applies to other unresolved creditor claims. If the settlor received Medi-Cal long-term care benefits, this should be checked and resolved, or at minimum reserved against, before final distributions go out.

Planning ahead: what actually works

For deaths on or after January 1, 2017, the fix for estate recovery is straightforward: get the home and other assets titled into a revocable trust, and make sure the trust is actually funded, meaning the deed and other titles are changed, not just the trust document signed and left in a drawer. An unfunded trust does nothing here; if the house is still in the decedent’s individual name at death, it’s part of the probate estate regardless of what the trust document says.

Trust funding doesn’t solve the separate problem of qualifying for Medi-Cal while the recipient is still alive. As of January 1, 2026, California reinstated the asset test for Long-Term Care Medi-Cal and related programs, and assets in a revocable trust still count toward that $130,000 individual or $195,000 couple limit, because the recipient can revoke the trust and reclaim the assets at any time. Families trying to solve the eligibility problem, not just the recovery problem, need to look further, toward irrevocable trust structures, deed-based transfers with retained life estates, or spend-down strategies, each with real tradeoffs including loss of control and California’s 30-month look-back period for nursing-facility-related transfers.

Community property adds another layer

If the Medi-Cal recipient was married, whether the home is community property or one spouse’s separate property affects both Medi-Cal eligibility during life and recovery exposure after death. This distinction gets made differently depending on how the property was acquired, titled, and treated during the marriage, and it’s worth getting right before assuming either the best or worst outcome.

What to do if you’ve received a recovery notice

If DHCS has already sent a notice of claim, don’t assume the claim amount is correct, that it reaches assets already in a fully funded trust, or that a hardship waiver isn’t available. These claims can sometimes be reduced, negotiated, or waived, but only if someone actually reviews the numbers, confirms which assets were actually part of the probate estate, and checks the family’s circumstances against the statutory exemptions. Paying a claim at face value without checking it is a common and expensive mistake.

The honest caveat

The exposure that’s hardest to fix after the fact is an unfunded trust: if the settlor already received Medi-Cal long-term care benefits and the home or other assets were never actually retitled into the trust, that’s part of the probate estate, and it’s largely too late to change that after death. The honest work at that point is making sure the claim itself is accurate, confirming which assets it can actually reach, checking for a hardship waiver, and not distributing assets before the exposure is resolved. For families still in the planning stage, the lesson is the same one that applies to probate generally: get the trust funded before it matters, not after.

Talk to a real California estate attorney

If you’re a trustee or family member facing a Medi-Cal recovery claim, or you’re trying to plan ahead of one, I’ll walk through what’s actually exposed, what waivers might apply, and what your real options are.

Talk to Eric Ridley is a free 60-minute consultation by phone or Zoom, anywhere in California. Or call (805) 244-5291.

Frequently asked questions

Can Medi-Cal recover long-term care costs from a trust after death in California?

Generally, no, if the trust was fully funded before death. The Department of Health Care Services can file a claim against a deceased Medi-Cal recipient’s probate estate for certain long-term care and related costs, but since SB 833 took effect for deaths on or after January 1, 2017 (Welfare and Institutions Code § 14009.5), that claim is limited to the probate estate. Assets already retitled into a funded revocable trust generally aren’t part of the probate estate and fall outside the claim.

Does putting the house in a revocable trust protect it from Medi-Cal recovery?

Generally yes, as long as the trust is actually funded, meaning the deed was changed before death, not just the trust document signed. Since 2017, Medi-Cal estate recovery reaches only the probate estate. A house titled in the trust’s name isn’t part of the probate estate, so it’s generally outside the state’s recovery claim, even though that same asset still counts toward the Medi-Cal asset test while the recipient is alive.

What benefits trigger a Medi-Cal estate recovery claim?

Generally nursing facility services, home and community-based services, and related hospital and prescription drug costs paid for a recipient who was age 55 or older at the time services were received. The claim covers the cost of these specific categories of benefits, not every Medi-Cal expenditure made on the recipient’s behalf.

Is there a hardship waiver for Medi-Cal estate recovery?

California has expanded protections in recent years, including limits tied to whether a spouse, minor child, or disabled child survives the recipient, and hardship waiver provisions for certain low-income heirs. These exemptions are fact-specific and require an affirmative application. They don’t apply automatically just because a family needs the home.

What planning actually protects assets from Medi-Cal recovery?

A fully funded revocable trust protects against estate recovery itself, since recovery reaches only the probate estate. What it doesn’t do is keep those assets from counting toward the Medi-Cal asset test while the recipient is alive, currently $130,000 for an individual or $195,000 for a couple as of January 1, 2026. Protecting assets from that eligibility test, rather than from recovery, requires different tools, like irrevocable trust structures or deed-based transfers with retained life estates, which come with real tradeoffs including loss of control and California’s 30-month look-back period for nursing-facility-related transfers.

This is general information about California law, not legal advice for your situation.

Medi-Cal Recovery Against a Trust in California