When a loved one passes away in California, families are often shocked to learn that Medi-Cal may try to recover money spent on the person’s medical or long-term care. This is called estate recovery, and it can put a family home at risk if you don’t plan ahead.
This guide explains how Medi-Cal estate recovery works, when it applies, and — most importantly — how families can protect their property. It supports our full post, Selling a Parent’s House to Pay for Care in California.
What Is Medi-Cal Estate Recovery?
Medi-Cal is California’s Medicaid program that helps pay for healthcare and nursing-home costs for people with limited income or assets. When a Medi-Cal recipient dies, the state can file a claim against their estate to recover the amount it paid for their care.
In many cases, the family home is the most valuable part of the estate, so it’s often targeted for recovery.
When Can Medi-Cal Take the House?
Medi-Cal cannot take or force the sale of a home while the recipient is alive. However, after the person’s death, the state may place a claim or lien against the property to recover costs.
This typically happens when:
- The deceased person was a Medi-Cal recipient who owned property in their name alone.
- There is no surviving spouse, registered domestic partner, or dependent child living in the home.
- The home becomes part of the probate estate.
Example: A mother in Bakersfield received Medi-Cal for five years of nursing-home care. After her passing, the state filed a $180,000 estate recovery claim against her house, forcing her children to sell it to settle the debt.
When the Home Is Protected
Thankfully, not every Medi-Cal recipient’s home is vulnerable to estate recovery. California law provides several important protections and exemptions that can keep your family home safe from being used to repay medical costs.
Spouse or Domestic Partner Lives There
If a surviving spouse or registered domestic partner continues to live in the home, the state cannot collect on the property until after that person passes away. This protection allows the surviving partner to remain securely housed without the stress of losing their home.
Disabled or Minor Child Lives There
Homes where a dependent or disabled child resides are also exempt from Medi-Cal estate recovery. This rule ensures that vulnerable family members are not displaced after the recipient’s death.
Hardship Waivers
If selling the property would cause significant hardship — such as homelessness or loss of income — families can apply for a hardship waiver.
Example: A family in Fresno successfully applied for a hardship waiver after proving that their adult daughter with disabilities relied on the home for housing. This exemption allowed her to remain in the property and prevented the estate from being liquidated.
How to Prevent Estate Recovery Before Death
Planning ahead is key. There are several legal strategies that can help families protect a home before a Medi-Cal recipient passes away.
1. Transfer Property to a Living Trust
Homes held in a properly structured living trust avoid probate, keeping them outside the estate recovery process.
2. Use a Transfer-on-Death (TOD) Deed
This deed lets the home automatically pass to a named beneficiary when the owner dies — no probate needed. California recognizes TOD deeds under Probate Code §5642, which can prevent estate recovery claims.
3. Remove the Home from the Estate
By transferring ownership before death (if done within Medi-Cal’s rules), the home may no longer be part of the estate. However, timing and look-back periods matter — always consult an estate planning attorney before making transfers.
What If the State Already Filed a Claim?
If the state has already placed a claim after your parent’s passing, don’t panic — you still have options. Acting quickly and understanding your rights can make a big difference in how much you owe.
1. Pay the Claim Off with Other Assets
If there’s available cash, life insurance proceeds, or other liquid assets, you can use them to pay the Medi-Cal claim and keep the house. This approach helps you preserve family property while resolving the estate efficiently.
2. Negotiate the Amount
The amount Medi-Cal requests isn’t always final — and families have the right to ask for a detailed breakdown of charges. By reviewing billing records and verifying covered services, you may be able to negotiate a lower repayment amount with the state.
3. Sell the Property to Settle the Debt
If funds aren’t available, selling the home may be necessary. Many families choose to sell as-is to avoid repair costs and long timelines — a route that can provide quick cash to close the estate.
Example: A Los Angeles family sold their mother’s home for cash to pay off a $150,000 Medi-Cal claim. The sale closed in 14 days, allowing them to finalize probate without financial strain.
How Selling the Home Can Help
Selling a Medi-Cal-affected property is often the most practical way to resolve estate recovery and help families move forward. It converts the home’s value into cash quickly — which can be used to settle Medi-Cal claims and finalize the estate.
Covers Medi-Cal Claims Quickly
A fast sale provides immediate funds to pay off recovery claims and other estate debts. This can prevent interest, penalties, or legal action from delaying distribution to heirs.
Avoids Ongoing Maintenance and Taxes
Vacant homes still rack up costs like property taxes, insurance, and upkeep. Selling eliminates these ongoing expenses while the estate is being settled.
Prevents Further Legal or Probate Delays
When a home is sold promptly, the estate can close faster, reducing the chance of additional court hearings or disputes. This is especially helpful if multiple heirs are involved.
The Role of Probate
If your parent’s estate goes through probate, Medi-Cal can only recover from probate assets — not jointly owned property or trust assets. Probate is a formal process that identifies assets, pays debts, and distributes what remains to heirs.
Final Thoughts
So, can Medi-Cal take your house after death in California?
The short answer: sometimes, yes — but not always.
With the right planning tools — like trusts, TOD deeds, or hardship waivers — you can protect your family’s home from being used to repay Medi-Cal expenses. Acting early is key.
If you’ve inherited a home affected by Medi-Cal recovery or probate, Mrs. Property Solutions can help you sell quickly and navigate the process with compassion and clarity.
📞 Call us today at (602) 376-8391 to discuss your situation confidentially and get a fair, no-pressure cash offer.