Gov. Brown signs material estate planning reform bill

A recent article on a California legislative bill focusing upon estate planning that was recently signed into law by Gov. Jerry Brown terms the development “a planning opportunity” for some spouses across the state.

Here’s why.

Federal law mandates that states attempt to recover funds from the estate of any individual who received certain types of medical care after he or she reached the age of 55.

Presently, and as noted in the above-cited article, California’s Medi-Cal Estate Recovery scheme goes beyond that federal dictate. Under the law, authorities are entitled to seek recovery from a surviving spouse’s estate in any case where that spouse received assets from the estate of a deceased spouse who had been receiving Medi-Cal benefits.

That creates uncertainty for a surviving spouse, of course, who might necessarily have to focus upon transferring assets derived from a deceased partner’s estate to ensure that they won’t be subject to recovery upon the death of the surviving spouse.

The governor’s signature on Senate Bill 833 changes things in a fundamental way. Effective from January 1 of next year, Medi-Cal officials will only be able to seek recovery from the probate estate of a decedent.

Understandably, the above-cited media focus points out, the change “will likely motivate persons who receive Medi-Cal to consider how best to keep their assets outside of their probate estate … to avoid Medi-Cal recovery against their estates and so protect their loved ones.”

A revocable living trust comes readily to mind as a vehicle for doing that. That estate planning instrument is arguably the optimal embodiment of the above-described planning opportunity for many people in the state.

Persons seeking information about the new law and the planning possibilities it engenders can speak with a proven estate planning attorney.

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