New Medi-Cal recovery law is another reason for avoiding probate


Avoiding probate has long been an important goal for those preparing an estate plan in California. Probate refers to the process of administering a deceased person's estate through the state court system. In California, the process can take months or even years. It can also be very expensive. Fees for lawyers and executors are based on the size of the estate and can devour a significant portion of the decedent's assets.

Now there is an additional reason to avoid probate in California. In last week's post we discussed the new Medi-Cal recovery law which will apply to the estates of California residents who die on or after January 1, 2017. Among several significant changes, the new law provides that only assets in an individual's probate estate will be subject to Medi-Cal recovery claims.

In general, assets that are held in the name of an individual will be considered part of that individual's probate estate. A common probate avoidance strategy is to transfer assets into a revocable trust during the individual's lifetime, so they are no longer titled in that individual's name at the time of death. Other strategies include transferring or re-titling assets during one's lifetime, and using non-probate transfers like joint tenancy and death beneficiary designations.

At our law firm, we attempt to help California residents with their estate planning needs, which can include a goal of avoiding probate. We strive to discuss all aspects of estate planning, including the new Medi-Cal recovery rules and strategies to keep an estate out of probate.

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