Legal Question in Wills and Trusts in California
A message was inadvertently sent without grammar or spelling corrections at approximately 8:40 PM Pacific time on April 16, 2015. Please ignore. My question was to have read more simply that with escrow closing today on my mother's house in what we thought was an irrevocable trust that had been in place for 20 years prior to my mothers passing two months ago. It was found to have mistakenly been left in her name as a single woman when the title company was about to close escrow today on the sale of it. Another title company that we had used to refinance the house while it was in an irrevocable trust 18 months ago temporarily for a second refinancing of the house did not place it back in the irrevocable trust. We had thought they were doing that and we also had bought our attorney had followed up on this absolutely critical situation to have it put back in and air revocable trust. We were not proactive and triple checking this ourselves although I know we did inform the attorney that the refinance transaction was complete being very concerned that it was out of this 92 year old ladies trust that was set up for me.
Our concern is that Medi-Cal, for which she had hundreds of thousands of dollars in expenses paid for over the nearly 2 years in a nursing home and numerous operations would wipe out the $250,000 house value if indeed the state of California and Medi-Cal attempt to go after those funds that were in her name at the of Her death of February. Is Medi-Cal going to be able to put a lien on this house or will a favorable decision in a probate court with the Hagstedd Precedent on probate being able to stop any Medi-Cal action with this situation?
1 Answer from Attorneys
I'm not sure what the result is going to be because it's a matter as to what position is taken by the Estate Recovery Section of the Department of Health Care Services. I suggest that you obtain a court order declaring the property to be in the trust before you submit any statement to Medi-Cal stating that your mother did not own any real property upon your death.
Incidentally, the petition wouldn't be a Heggstad petition. Instead it would be a petition under Heaps v. Heaps, an appellate decision which stands for the proposition that trust property remains trust property unless the trust is revoked with respect to that property, even if the property was removed from the trust for refinancing purposes.
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