Cal. Welf. & Inst. Code § 4885

(a) Notwithstanding any other state law, and only to the extent permitted under federal law, the program may permit a change in the designated beneficiary of an ABLE account, made during the life of the designated beneficiary, to take effect upon the death of the designated beneficiary. The amount to be transferred pursuant to the successor beneficiary designation is subject to all of the relevant payment and tax provisions of the federal ABLE Act.

(b) Following the death of a designated beneficiary, and only after the State Department of Health Care Services has received approval by the federal Centers for Medicare and Medicaid Services, both of the following shall apply: (1) For CalABLE accounts established on or after January 1, 2023, the following shall apply: (A) The state shall not seek recovery pursuant to Section 14009.5 of any amount remaining in a designated beneficiary’s CalABLE account for any amount of medical assistance paid for the designated beneficiary after the establishment of the account under the state’s Medicaid plan established under Title XIX of the federal Social Security Act. (B) The state shall not file a claim for any amount remaining in a designated beneficiary’s CalABLE account for the payment under subdivision (f) of Section 529A of the Internal Revenue Code. (2) For CalABLE accounts and ABLE accounts established prior to January 1, 2023: (A) The state shall not seek recovery pursuant to Section 14009.5 of any amount remaining in a designated beneficiary’s CalABLE or ABLE account for any amount of medical assistance paid for the designated beneficiary after the establishment of the account under the state’s Medicaid plan established under Title XIX of the federal Social Security Act. (B) The state shall not file a claim for any amount remaining in a designated beneficiary’s CalABLE or ABLE account for the payment under subdivision (f) of Section 529A of the Internal Revenue Code.