Sometimes, but not automatically. Since 2017, California’s Medi-Cal Estate Recovery Program can only collect from assets that pass through probate, and only for nursing facility or home care received at age 55 or older. A living trust, a joint tenancy, or a Transfer-on-Death deed generally keeps the house out of reach entirely.
TLDR
- California limits Medi-Cal estate recovery to probate assets only, so a home held in a trust, joint tenancy, or with a Transfer-on-Death deed is generally protected.
- Recovery only applies to care the Medi-Cal recipient received at age 55 or older, and only for nursing facility, home and community-based services, and related hospital or prescription costs from that care.
- The state cannot collect while a surviving spouse or registered domestic partner is alive, and cannot file a claim when a surviving child is under 21 or is blind or disabled.
- DHCS must be notified of the death within 90 days, and families who can’t afford to pay have 60 days from the claim letter to apply for a substantial hardship waiver.
- Planning tools like a living trust or a TOD deed have to be set up before death. Once someone has passed, the options for protecting the house narrow fast.
A letter from the Department of Health Care Services shows up weeks or months after a parent passes, and for a lot of families it’s the first they’ve heard of estate recovery at all. Nobody explained it while their mom or dad was alive. Nobody mentioned it during intake at the nursing home, even though California is supposed to send a notice about it twice a year.
So the question lands hard: does the state get to take the house.
The honest answer is sometimes, and it depends on how the house was owned, who’s still living there, and how old your parent was when they received care. None of that is obvious from the letter itself, and the letter doesn’t explain your options either.
You’re probably dealing with this while you’re still grieving, and that’s its own kind of hard.
What Medi-Cal Estate Recovery Actually Covers
Estate recovery is not a general debt against everything your parent owned. It’s a specific claim, limited by law to money Medi-Cal spent on nursing facility care, home and community-based services, and the hospital and prescription costs tied directly to that care, and only for care your parent received at age 55 or older. If your parent used Medi-Cal for a doctor’s visit at 40 or a hospital stay at 50, none of that is recoverable. The California Department of Health Care Services, the agency that runs Medi-Cal, lays this out directly on its Estate Recovery Program page.
The other limit that surprises most people: DHCS can only collect from assets that go through probate. Real property held in a living trust, owned in joint tenancy with right of survivorship, or transferred by a Transfer-on-Death deed passes to the next owner outside of probate, and the state has nothing to attach.
When the State Can Take the House
DHCS can only pursue the home if it becomes part of your parent’s probate estate and no exemption applies. Practically, that means three things line up at once: the house was in your parent’s name alone, not a trust, not joint tenancy, your parent received Medi-Cal-funded nursing or home care at 55 or older, and no surviving spouse, minor child, or disabled child is living there.
When all three are true, DHCS sends a claim after receiving notice of the death, usually as a request for payment from the estate rather than a forced sale on the spot. The family or the estate’s representative has to respond, either by paying the claim from other assets, negotiating it, applying for a hardship waiver, or in some cases selling the property through probate to cover it.
DHCS must be notified of the death within 90 days, using its Notice of Death process, with a copy of the death certificate.
The Situations Where the Home Is Protected
California law builds in real protections. The most common ones:
- A surviving spouse or registered domestic partner. DHCS is barred from recovering from the estate at all while a spouse or partner is alive, for anyone who died on or after January 1, 2017.
- A surviving child under 21. No claim is filed.
- A surviving child who is blind or disabled, at any age, as defined by the Social Security Act. No claim is filed.
- The asset never entered probate. A trust, joint tenancy, or TOD deed keeps the home out of the estate DHCS can reach in the first place.
None of these protections are automatic paperwork you have to chase down after the fact. Most of them are simply true or not true based on how the house was titled and who’s living in it when your parent passes. The one that does require action is the hardship waiver, below.
What a Hardship Waiver Covers, and How to Apply
DHCS will waive all or part of a claim if paying it would cause a substantial hardship, but the application has to go in within 60 days of the date on the estate recovery claim letter. The waiver form is DHCS 6195, and it can be submitted by email to HW@DHCS.CA.GOV or by mail.
Substantial hardship isn’t a vague standard. State regulations lay out specific qualifying situations: the inheritance would let you get off public assistance, the property is part of an income-producing business like a working farm, or you’re aged, blind, or disabled and have lived in the home continuously for at least a year and can’t get financing to cover the claim. DHCS has 90 days to respond once you apply.
One thing the regulation is explicit about: a hardship waiver won’t apply if your parent used estate planning specifically to shelter assets and dodge recovery. The protections above have to be genuine steps taken for their own reasons, not a last-minute move made to beat the claim. Some families go the other direction and sell before the need for care even starts, selling early to meet Medi-Cal’s asset limits, which avoids the estate recovery question entirely.
How to Keep the House Out of Probate Before It Comes to This
The tools that work all have to be in place before your parent dies, which is why this section matters more if you’re reading it while a parent is still alive and on Medi-Cal.
A revocable living trust
Property in a properly funded trust passes to beneficiaries without going through probate, which takes it out of DHCS’s reach entirely.
It’s the right tool when the estate involves more than just the house, multiple properties, other assets, or beneficiaries who need the flexibility a trust allows, since a trust can also spell out how and when beneficiaries receive things. It costs more to set up than a TOD deed and has to be actively funded, the house has to be deeded into it, not just named in it.
A Transfer-on-Death deed
Under California Probate Code section 5642, a homeowner can record a TOD deed naming a beneficiary who inherits the property automatically at death, no probate required. It costs far less to set up than a trust and can be revoked at any time before death.
It’s the better fit when the house is the only asset that needs to avoid probate and there’s one clear beneficiary or a small group who will own it jointly, without the added structure a trust provides for a more complicated estate.
Joint tenancy with right of survivorship
When a co-owner has survivorship rights, their share passes to the surviving owner directly, outside probate. This one only makes sense when the parent is comfortable adding someone to the title while still alive, since it hands over a real ownership share immediately, not just a future interest, and it can complicate things like capital gains treatment or a parent’s ability to refinance.
None of these are something to set up alone. An elder law attorney can walk through which option fits your family’s situation, including how Medi-Cal’s own asset and transfer rules interact with each one, since a transfer made too close to applying for benefits can create its own problems.
What Options Do You Have
If your family is already facing a claim and weighing whether to sell to cover it, that decision deserves its own comparison of selling versus other ways to resolve it. Selling a parent’s house to pay for care walks through those options in full.
If you’re dealing with a Medi-Cal claim against a house you inherited, or the property needs to be sold to settle the estate, Mrs. Property Solutions buys houses across Los Angeles County and Southern California in as-is condition, no repairs and no cleanout required.
The company has purchased 150+ homes since 2016 and has earned 50+ five-star reviews from families in situations like this one. There are no commissions and no last-minute changes to the offer, the offer made is the offer honored.
If it would help to talk through what selling could look like for your specific situation, you can reach Mrs. Property Solutions at (626) 344-9579 or request a no-obligation cash offer online.
Frequently Asked Questions
Does Medi-Cal always try to take a house after someone dies?
No. Estate recovery only applies to assets that pass through probate, and only for nursing facility or home care the person received at age 55 or older. A home in a trust, held in joint tenancy, or transferred by a TOD deed is generally outside the state’s reach entirely.
What if my parent’s house was in a living trust?
A properly funded living trust generally avoids probate, and DHCS can only recover from probate assets. Property that passes through a trust to its beneficiaries typically stays outside the estate recovery process. Confirm the trust was funded with the property before assuming this applies. An unfunded trust doesn’t protect anything.
Can Medi-Cal take the house if my surviving parent still lives there?
No. DHCS cannot pursue an estate recovery claim while a surviving spouse or registered domestic partner is alive, for deaths on or after January 1, 2017. The state’s ability to recover ends permanently once that protection applies, not just delayed until the survivor also passes.
What if I can’t afford to pay an estate recovery claim?
You can apply for a substantial hardship waiver using DHCS form 6195, submitted within 60 days of the date on the claim letter. Qualifying situations include losing your primary residence, needing the property to stay off public assistance, or relying on it as an income-producing business.
How long do I have before Medi-Cal can file a claim?
The person handling the estate must notify DHCS of the death within 90 days, using the Notice of Death process. DHCS can present its claim within four months after receiving that notice, so the timeline moves faster than most probate proceedings.
Does a Transfer-on-Death deed stop estate recovery?
Generally, yes. A TOD deed recorded under California Probate Code section 5642 lets the home pass directly to a named beneficiary at death, outside of probate, which is the only kind of asset DHCS can reach. It has to be recorded before death to work.
What if my sibling with a disability lives in the house?
DHCS will not file a claim when the deceased is survived by a child who is blind or disabled, as defined by the Social Security Act, regardless of that child’s age. This protection applies on its own and doesn’t require a separate hardship application.
Disclaimer: This article explains how Medi-Cal estate recovery generally works in California. It isn’t legal or tax advice, and rules can vary by individual circumstances and change over time. Talk to an elder law attorney or a probate attorney about your specific situation.
Hepful Resources
- Inherited a house in California
- Can You Sell a Parent’s House If They’re in Assisted Living?
- Selling a Parent’s House When They Move Into a Nursing Home