Riverside County Public Guardian v. Snukst

Case Number: E074949

Court: Cal. Ct. App.

Date Filed: 2022-01-10

Case Brief – Riverside County Public Guardian v. Snukst

Court: COURT OF APPEAL OF THE STATE OF CALIFORNIA
Date: 2025-09-03
Case Number: E074949
Disposition: The Court reversed the probate court’s approval of the trust’s final account and remanded with instructions to honor the California Department of Health Care Services’ claim for Medi‑Cal reimbursement under Welfare & Institutions Code § 14009.5.

Holding

The court held that assets transferred to a revocable inter vivos trust upon the settlor’s death are part of the settlor’s “estate” for purposes of Medi‑Cal estate‑recovery, and therefore the Department of Health Care Services is entitled to be reimbursed from the trust before any distribution to the sole beneficiary.

Narrative

Lead – In a decision that sharpens the intersection of probate law and Medicaid estate‑recovery, the California Court of Appeal ruled that a revocable living trust created by a Medi‑Cal recipient does not shield the trust’s assets from the state’s statutory right to recoup health‑care costs. The ruling reverses a Riverside County probate court order that had allowed the trust’s sole beneficiary, Shawna Snukst, to receive the entire annuity proceeds, and remands the matter for compliance with Welfare & Institutions Code § 14009.5.

Procedural backdrop – Joseph Snukst entered a senior‑care facility in 2009 and, after a conservatorship was appointed in 2015, received Medi‑Cal benefits until his death on July 29, 2016. During his lifetime he had established a revocable inter vivos trust (the “Snukst Trust”) in 2004, naming his niece Shawna as the sole beneficiary and designating the trust as the pay‑on‑death beneficiary of a $804,456.13 annuity. Upon Joseph’s death the annuity was paid into the trust. The California Department of Health Care Services (the “Department”) filed a claim for $480,465.52—the amount it had paid for Joseph’s Medi‑Cal services. The Riverside County Public Guardian, acting as both conservator of Joseph’s estate and trustee of the Snukst Trust, sought court approval to satisfy the claim from the trust assets. The probate court denied the request, reasoning that the annuity had ceased to be a conservatorship asset at death and that the trustee had no statutory duty to satisfy the claim. The Department appealed.

Key issues – The appeal centered on three questions: (1) whether a revocable inter vivos trust that receives assets upon the settlor’s death is “estate” within the meaning of Welfare & Institutions Code § 14009.5 and the federal Medicaid statute; (2) whether the public guardian‑trustee, in either capacity, must honor the Department’s reimbursement claim; and (3) whether the probate court’s denial was procedurally sound.

Statutory and regulatory framework – California’s Medi‑Cal program implements the federal Medicaid program. Welfare & Institutions Code § 14009.5 authorizes the state to seek reimbursement from a deceased recipient’s estate, defined to include “all real and personal property and other assets … including assets conveyed … through … a living trust.” Cal. Code Regs., tit. 22, § 50960.12(a) mirrors 42 U.S.C. § 1396p(b)(4), which expressly expands the definition of “estate” to encompass assets transferred by “other arrangement,” such as revocable trusts. The Department’s claim therefore rests on a mandatory statutory recovery scheme, subject only to limited exemptions that Shawna did not assert.

Court’s analysis – The appellate court affirmed the broader federal definition of “estate” and rejected Shawna’s reliance on pre‑1993 Ninth Circuit cases (e.g., Citizens Action League v. Kizer) that limited estate recovery to probate‑only assets. The court emphasized that California has incorporated the post‑1993 definition into its regulations, rendering those older precedents obsolete. Moreover, the court distinguished Arluk Medical Center Industrial Group, Inc. v. Dobler, which held that a trustee of a revocable trust has no duty to preserve trust assets for creditors of the settlor’s probate estate. The Court of Appeal noted that Dobler addressed a non‑Medi‑Cal creditor claim; the Medicaid recovery scheme is a statutory lien that attaches to the settlor’s “estate” as defined by law, not merely to probate assets.

The court also addressed procedural deficiencies. The probate court denied the Department’s claim without providing a reasoned explanation, violating the requirement that a court’s order be supported by findings of fact and conclusions of law. Even assuming the probate court’s reasoning, the court found it misplaced: the trust’s assets, though held in a revocable instrument, remained “property in which the individual had legal title or interest at the time of death” and thus fell squarely within the recovery definition.

Disposition and remand – Accordingly, the appellate court reversed the probate court’s approval of the trust’s final account and remanded with instructions to honor the Department’s claim. The Department is entitled to recover the $480,465.52 from the trust before any distribution to Shawna. The remand also allows the probate court to resolve any factual disputes regarding the validity of Joseph’s Medi‑Cal eligibility and the adequacy of the supporting documentation, issues the appellate court expressly declined to adjudicate.

Impact and unresolved questions – This decision reinforces California’s aggressive stance on Medicaid estate recovery, confirming that revocable trusts do not provide a shield for assets that pass directly to a beneficiary upon death. Practitioners must now ensure that trustees of such trusts promptly notify the Department of Health Care Services of the settlor’s death and anticipate a lien on trust assets. The ruling also underscores the need for probate courts to furnish detailed reasoning when denying statutory recovery claims.

Open questions remain concerning the interaction of the 2016 amendment to § 14009.5, which limited recovery for individuals who died on or after January 1, 2017. While Joseph’s death predates that cutoff, future cases will test the application of the amendment to trusts created after 2004 but where the settlor dies post‑2017. Additionally, the decision leaves untouched the potential for hardship waivers or other statutory exemptions that may arise in more complex family situations.

Referenced Statutes and Doctrines

Welfare & Institutions Code § 14009.5 (Medi‑Cal estate‑recovery provision)
Welfare & Institutions Code §§ 14203, 14000 et seq. (Medi‑Cal program authority)
Probate Code §§ 19000‑19040, 19202 (trust creditor‑notice procedures)
42 U.S.C. § 1396p(b)(4) (Federal definition of “estate” for Medicaid)
Cal. Code Regs., tit. 22, § 50960.12(a) (Medi‑Cal estate‑recovery regulations)

Key Cases Cited