MediCal Chargeback (part 3)

Another major benefit for creating a living trust in California has to do with public benefits. For example, if a person on public benefits becomes incapacitated or injured in a car accident, they may have to live in a skilled nursing home that can nowadays cost $6,000/month for the entire time the person is alive. MediCal will pick up the cost if the person in a skilled nursing home has less than $2,000 cash. If they have a large amount of cash then MediCal is not going to pay anything until all that cash is used up.

In this scenario, where someone is in a skilled nursing home and they run up a bill over their life before they pass (let's say $900,000), if you have your assets in a will or without a will, MediCal will come back and take other assets. They call it a chargeback. They will get reimbursed for what they paid you and that only applies on a will or without a will. If you have your house in a trust then MediCal does not have the right to do a chargeback and take the house.

Overall, a trust will cost you a little bit more upfront but will hopefully cost less in the future. The out-of-pocket cost to create a trust is higher since it is more complicated than a will. A will normally costs less to prepare upfront but will normally cost much more in time, effort and money in the future when you pass away.

Reprinted with permission Rex L. Crandell, attorney at law.

Diana Wade is a Legal Document Assistant. She can be reached at (661) 821-0494 or [email protected]. Diana is not an attorney; she can only provide self-help services at your specific direction. Kern County LDA #185, ex 4/11/23.