If a parent received certain Medi-Cal benefits at age 55 or older and died on or after January 1, 2017, the California Department of Health Care Services (DHCS) can ask to be repaid from the house only if the house passes through the parent’s probate estate. A house held in a funded living trust, in joint tenancy, or with another non-probate form of title generally falls outside that claim. Even a house that does go through probate is protected while a surviving spouse or registered domestic partner is alive, or when there is a surviving child under 21 or a blind or disabled child of any age. Heirs also have 60 days from DHCS’s claim letter to ask for a hardship waiver.

Most families learn about Medi-Cal estate recovery only after the funeral, when they start dealing with the house. Below are the rules that decide whether there is any claim at all, the deadlines that apply once there is one, and how a claim affects selling an inherited California home.

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The 2017 Change: Why the Date of Death Matters

California narrowed its estate recovery program with SB 833, signed on June 27, 2016. For Medi-Cal members who died on or after January 1, 2017, DHCS can recover only from assets in the member’s probate estate. Its recovery is also limited to a narrower set of services: nursing facility care, home and community-based services, and the hospital and prescription drug services provided while the person was receiving that care, along with the managed care premiums paid for those services.

The old rules still apply to members who died before January 1, 2017. For those deaths, DHCS could recover from nearly all assets the person owned at death, including some non-probate assets, and for most Medi-Cal services after age 55. If you are dealing with a parent who died years ago and the estate was never settled, check the date of death first. The answer changes the whole analysis.

There are two more basic limits. Recovery applies only to benefits received on or after the member’s 55th birthday, and DHCS’s own page says that if the deceased owned nothing at death, nothing will be owed. For deaths on or after 2017, county guidance from the Los Angeles County Department of Public Social Services adds that the claim is capped at the lesser of the value of the estate’s assets, less encumbrances, or the amount Medi-Cal actually paid.

Does the House Go Through Probate?

For post-2017 deaths, the most important question is how the house was titled when the parent died. A house generally escapes estate recovery if it passed outside probate, for example:

it was held in a properly funded revocable living trust, and passes to the beneficiaries through the successor trustee;
it was held in joint tenancy, so it passed automatically to the surviving joint tenant;
it passed under another survivorship or beneficiary arrangement, such as a transfer-on-death deed.

Legal aid organizations such as Bay Area Legal Aid describe these as generally outside recovery for post-2017 deaths. Our guides on selling a house held in a trust as a successor trustee and on inheriting through a transfer-on-death deed cover how those transfers work.

If the house was in the parent’s name alone, it will usually need a court process to transfer it. That makes it part of the probate estate, and DHCS can make a claim. A common problem is a trust that was signed but never funded, so the deed still shows the parent’s individual name. Families can sometimes fix that with a Heggstad petition, which asks the court to confirm the house belonged in the trust. Whether a successful petition changes the estate recovery answer in a given case is a question for the estate’s attorney and DHCS. Our article on the Heggstad petition explains when courts grant one.

Simplified procedures also need care. Since April 1, 2025, AB 2016 lets heirs use a court petition, instead of full probate, to transfer a primary residence worth up to $750,000. Do not assume a simplified court procedure takes a house outside estate recovery. Ask the estate’s attorney, and send DHCS its notice regardless.

Who Is Protected Even if There Is a Claim

Welfare and Institutions Code section 14009.5 bars DHCS from recovering from the estate if the deceased member is survived by:

a spouse or registered domestic partner;
a child under 21; or
a child of any age who is blind or disabled.

The surviving spouse rule is the one families most often miss. When the first parent dies, DHCS generally cannot collect while the other parent is alive. The issue usually arises after the second parent’s death, sometimes years later, when it becomes a question about the second parent’s estate.

Step One: Send DHCS the Notice of Death Within 90 Days

Probate Code section 215 requires the person handling the estate to notify the Director of Health Care Services within 90 days of a Medi-Cal member’s death, with a copy of the death certificate. The estate’s attorney normally sends it. If there is no attorney, the duty falls to the personal representative, a beneficiary, or whoever has the person’s property. DHCS says its online Notice of Death form is the fastest way to send it, and mail is also accepted. A phone call to the county or to another agency does not count.

Send the notice even if you think no claim applies. DHCS’s response is what lets the estate show buyers, title companies and the court that the issue was addressed. In a probate sale, the personal representative generally cannot safely distribute proceeds to heirs while a known creditor such as DHCS is unresolved.

Step Two: Find Out What Medi-Cal Paid

Families often have no idea how much Medi-Cal spent on a parent’s care. While the member is alive, the member or an authorized representative can request a statement of the expenses subject to recovery using form DHCS 4017. DHCS says the request can be made once per calendar year and carries a $5 processing fee. After death, DHCS sends the estate a claim letter showing the amount it is seeking.

Read the claim carefully. For a post-2017 death, ask whether the services listed are actually nursing facility or home and community-based services and their related hospital and drug costs, and whether the claim includes periods before age 55. Errors happen, and a question asked early is easier to resolve than one raised after escrow is open.

Step Three: Consider a Hardship Waiver Within 60 Days

DHCS can waive its claim, in full or in part, when collecting it would cause substantial hardship to the deceased’s dependents, heirs or survivors. The request must be submitted within 60 days of the date on the DHCS claim letter, using the Hardship Waiver Application (form DHCS 6195). DHCS accepts applications by email at HW@DHCS.CA.GOV or by mail.

One hardship ground is especially relevant to inherited homes. County guidance describes a “homestead of modest value” as a home whose fair market value is 50% or less of the average price of homes in the county, measured as of the date of death. When the estate involves such a home, DHCS may waive its claim. In high-cost counties such as Los Angeles, Orange or San Diego, few houses meet that test. In lower-cost inland counties it can matter more, so check the numbers. Other hardship arguments, such as an heir who lived in and cared for the parent, have their own documentation requirements. A legal aid office or elder law attorney can tell you whether your facts fit.

Sixty days is not long, especially for families still arranging a funeral and finding paperwork. Put the date on the calendar the day the claim letter arrives.

How a Claim Changes the Probate Sale

If DHCS has a valid claim against a probate estate, it is paid like other debts of the estate before heirs receive their shares. In practice, when the house is sold:

The personal representative lists or sells the house with the authority the court granted. Our explainer on how court confirmation works in a California probate sale covers when a sale needs a court hearing.
Escrow pays the mortgage, liens and closing costs from the sale price.
The remaining proceeds go to the estate, not straight to the heirs.
The personal representative pays valid creditor claims, including any DHCS claim that was not waived, before distributing the rest.

The DHCS claim does not normally stop the sale itself. It determines how much of the proceeds the heirs keep. Waiting for a decision on a hardship waiver can, however, delay final distribution. A house that sits empty while the family waits also keeps costing property taxes, insurance and utilities. In many cases the better plan is to sell on a normal schedule, hold the proceeds in the estate account, and let the waiver decision determine the final split.

A Hypothetical Example

Consider a mother who died in 2025 at 84. She received Medi-Cal nursing home care for her last three years, and Medi-Cal paid $210,000 for it. Her house is in her name alone, worth $650,000, with no mortgage. Her husband died in 2019. Her three children are all adults, and none is blind or disabled.

Because the house is in her name, it goes through probate, or through the simplified petition, and DHCS sends a claim. No spouse or qualifying child survives her, so the statutory bar does not apply. The home’s value is well above half the county’s average price, so the modest-homestead hardship ground is unlikely to help. Unless another hardship ground applies, the claim of up to $210,000 is paid from the sale proceeds before the children divide the rest.

Now change one fact: the mother had put the house into a funded living trust in 2015. Under the post-2017 rules, the house passes through her successor trustee outside probate, and DHCS generally has no claim against it. The same family, the same care and the same house can come out very differently based only on how title was held. These numbers are illustrative, not a prediction for any particular estate.

When a Fast Cash Sale Is Not the Right Call

If the estate faces a large DHCS claim, every dollar of sale price matters, because the claim is paid first and the heirs split what remains. If the house is in reasonable condition and the estate can carry it for a few months, listing it on the open market will usually bring more than a direct sale. A probate attorney can also tell you whether court confirmation will be needed, which can slow any sale.

A direct sale makes more sense when the house needs major repairs, has been vacant for a long time, has tenants or occupants, or when the heirs live far away and cannot manage a listing. In those situations, a single predictable closing can be worth more to the estate than the possibility of a higher price later.

Questions Families Ask

Does a claim include interest? DHCS’s main estate recovery page does not describe interest on an ordinary claim. Los Angeles County’s guidance says that when heirs arrange a voluntary post-death lien instead of paying at once, that lien accrues interest at a rate DHCS sets. If a claim letter shows interest, ask DHCS to explain it in writing.

Can we pay the claim and keep the house? Yes. Heirs can pay DHCS from personal savings or by refinancing. Keep in mind that keeping an inherited house usually means a property tax reassessment under Proposition 19 unless an heir moves in and qualifies for the exclusion.

Who can help for free? Legal aid organizations, such as Bay Area Legal Aid, help families with estate recovery claims and hardship waivers, and many county bar associations run referral services.

Mistakes That Make an Estate Recovery Claim Worse

Families rarely lose money because the law is unclear. They lose it because a deadline or a document slipped. These are the mistakes that come up most often:

Not sending the notice of death. The 90-day requirement under Probate Code section 215 falls on the estate’s attorney, or on the personal representative or a beneficiary when there is no attorney. Skipping it does not make the claim go away. It only means the issue surfaces later, often in the middle of escrow.
Distributing sale proceeds too early. A personal representative who pays heirs before resolving a valid DHCS claim can be exposed to personal liability for the shortfall. Keep proceeds in the estate account until the claim is paid, waived or confirmed not to exist.
Missing the 60-day hardship window. The clock runs from the date on the claim letter, not the date the family opens it.
Assuming the trust covers the house. A trust protects a house only if the deed actually puts the house in the trust. Pull the most recent recorded deed before relying on the trust.
Overlooking the surviving spouse bar. When the first parent dies, the surviving parent’s presence generally blocks recovery. Do not pay a claim the law does not allow.
Ignoring carrying costs while waiting. A vacant house can cost thousands of dollars a month in taxes, insurance, utilities and upkeep. Those costs come out of what the heirs eventually share.

When the Second Parent Dies

For married couples, an estate recovery claim usually comes up only at the death of the second spouse, because of the surviving spouse bar. When a married Medi-Cal member dies, DHCS generally cannot recover while the spouse or registered domestic partner is still alive. The house often passes to the surviving spouse, or stays in the couple’s trust.

When the surviving spouse later dies, the analysis starts over with that person’s own estate. If the surviving spouse also received Medi-Cal long-term care after 55, DHCS may have a claim for those services. Whether DHCS can reach the house again depends on how title was held at the second death and on the rules for that date. Families who took the house out of probate during the first administration, for example by funding a trust, are usually in a much better position at the second death.

If you are settling an estate and need to sell the house, our page on how we buy houses in California explains how a direct sale can work alongside a probate or trust administration. For a no-obligation cash offer, contact Cash Home Buyers CA or call (424) 435-2326. When you sell to us, we pay the standard closing costs, including the county and city transfer taxes, escrow and title. You can also look us up on our Google Business Profile.

Medi-Cal Estate Recovery and the Family House: Who Owes, Who Is Protected and the Deadlines