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Dear Advocate…
Once my dad passes away and the trust becomes irrevocable, is it subject to Medi-Cal estate recovery?


Dear Advocate:

My dad has a living trust stating that it will become irrevocable on death of the trustor. Once my dad passes away and the trust becomes irrevocable, is it subject to Medi-Cal estate recovery?

Sincerely,

Trustworthy in Tracy

Dear Trustworthy in Tracy,

Yes, it would be subject to recovery. In your dad’s case, the trust only became irrevocable upon the trustor’s (your dad’s) death, but, during his life, he retained the right to amend or terminate the trust. As a result, it is not an irrevocable trust since your dad could make changes to or revoke the trust until the time of his death. An irrevocable trust is one that cannot be amended or changed, or even terminated, during the trustor’s lifetime. Assets in irrevocable trusts are exempt from Medi-Cal recovery. However, your dad’s living trust is a simple living trust and it is subject to Medi-Cal recovery. Any such transactions should always be discussed with a qualified estate-planning attorney who is knowledgeable of Medi-Cal recovery rules.

If you need an attorney, CANHR has a statewide, state bar-certified referral service for attorneys specializing in estate planning for long term care. For more information, call CANHR at 800-474-1116.

Page Last Modified: September 19, 2016