What Changes for California Estate Plans in 2027

For a California family with an aging parent, or anyone likely to need long-term care, the 2027 change that matters most is the Medi-Cal asset limit. It’s scheduled to drop from $130,000 to $21,000 for a single person, and from $195,000 to $31,000 for a couple, no sooner than July 1, 2027. The estate tax exemption also goes up, the statutory power of attorney form is new, and the Prop 19 cap resets in February. The Medi-Cal change is the one to plan around now. The others can wait for your next plan review.

The Medi-Cal asset limit is scheduled to fall from $130,000 to $21,000

California brought back a Medi-Cal asset test on January 1, 2026, at $130,000 for one person and $65,000 for each added household member. The 2026 health budget bill, SB 164 (Stats. 2026, ch. 27), cuts that to $21,000 for one person, $31,000 for two, and $1,550 for each additional person, up to 10. It’s in Welf. & Inst. Code, § 14005.62.

The date isn’t fixed. The lower limit starts no sooner than July 1, 2027, and only after federal approval and after the Department of Health Care Services certifies in writing that its systems are ready. A delay at either step pushes it later. If you’re already on Medi-Cal, the new limit applies at your first annual renewal after it takes effect (§ 14005.62(b)).

Take a married couple with $180,000 in countable assets. Today they’re under the $195,000 limit. Under the new numbers they’d be roughly $149,000 over it.

If you move into a nursing home, Medi-Cal looks at anything you gave away in the 30 months before you entered, and gifts made on or after January 1, 2026 can delay your coverage, according to DHCS. So giving money to the kids to get under the new limit can delay your coverage when you need it.

A living trust doesn’t hide assets from the eligibility test, but it does matter after death. California’s estate recovery claim reaches only the probate estate (Welf. & Inst. Code, § 14009.5, subd. (f)(3)), so a house titled in a funded trust stays out of it.

If you or a parent may need long-term care in the next few years, this is the change to plan around now, while there’s time inside the look-back. The numbers by household size and the planning options are in Medi-Cal Asset Limits Are Back in 2026, and protecting the house from Medi-Cal covers the house.

The estate tax exemption rises to $15.48 million

The IRS published the 2027 figures in Rev. Proc. 2026-35. For people who die or make gifts in 2027:

• The basic exclusion for estate and gift tax is $15,480,000 per person, up from $15,000,000. The generation-skipping transfer exemption is the same amount.
• A surviving spouse who files to keep the first spouse’s unused exclusion (portability) can shelter up to about $30.96 million when the first spouse dies in 2027. The inherited amount is fixed by the year of the first death.
• The annual gift exclusion is $20,000 per recipient, up from $19,000.
• Gifts to a spouse who isn’t a U.S. citizen get a $201,000 annual exclusion.

There’s no sunset to race anymore. The 2025 federal tax law set the exemption at $15 million and indexed it for inflation. California has no estate tax of its own. For most families the only planning point here is the gift exclusion: if you give each year, you can give $20,000 per person starting January 1. The 2026 gift deadline post covers using this year’s $19,000 before December 31.

A new statutory power of attorney form starts January 1

AB 2199 (Stats. 2026, ch. 47) replaces the statutory form power of attorney in Prob. Code, § 4401. The new form adds a place to name a successor agent, a box to nominate your agent as conservator of your estate if a court ever needs to appoint one, and separate powers over digital assets and the content of your email, defined in new § 4466 by the state’s digital assets act.

Nothing in the bill voids a power of attorney you’ve already signed. If yours was signed on the old form, it still works. The new form is worth a look if you’d like a successor agent spelled out or want your agent to be able to reach your email and online accounts. My plans include two financial powers of attorney, a statutory form and a custom-written one, so clients can add those points at their next review. More on how these documents work is in the California durable power of attorney guide.

The Prop 19 cap resets February 16, 2027

When a parent’s home passes to a child who moves in, Prop 19 protects the parent’s assessed value plus a capped amount. For transfers from February 16, 2025 through February 15, 2027 that cap is $1,044,586 (BOE Letter To Assessors 2025/009). The Board of Equalization adjusts it every two years, and it hasn’t published the figure for transfers on or after February 16, 2027 yet. If a transfer falls near February 16, the date of death or the deed date decides which cap applies. The Prop 19 inherited-house guide walks through the one-year move-in and filing rules.

Two narrower changes

Special needs trusts and Prop 19. SB 974 (Stats. 2026, ch. 665) makes a special needs trust set up by court order under Prob. Code, § 3604 an eligible way to receive a parent-child transfer under Rev. & Tax. Code, § 63.2. It takes effect January 1, 2027. It doesn’t address a special needs trust a parent writes into their own plan, so it isn’t a reason to skip one. Details are in the SB 974 post.

Brokerage transfer-on-death accounts. SB 1288 (Stats. 2026, ch. 691) requires a brokerage that learns all owners of a TOD account have died to make a good-faith effort to notify each named beneficiary, and to pay out within 60 days after it receives the required documents. It covers charitable beneficiaries starting January 1, 2027 and everyone else when the last owner dies on or after January 1, 2028. More is in the SB 1288 post.

Every 2026 bill I’m tracking, including the POLST, notary and homestead changes, is on the Law Watch updates page. The executor-side change to the child support notice is in the SB 1264 post.

What to do before 2027

• If you or a parent may need nursing care in the next few years, remember the look-back before making gifts. It reaches 30 months and counts anything given away on or after January 1, 2026.
• If you give annual gifts, use the $19,000 exclusion by December 31. The $20,000 limit starts January 1.
• If a parent’s home is passing to a child, check which Prop 19 cap applies to the date of the transfer.
• Your existing power of attorney still works. Add a successor agent or digital-asset powers at your next review if you want them.

Talk to a real California estate attorney

If you’d like your plan checked against the 2027 changes, from the new power of attorney form to your gifting and the Prop 19 dates, I’ll go through it with you. Talk to Eric Ridley is a free 30-minute consultation by phone or Zoom, anywhere in California. Or call (805) 244-5291.

Frequently asked questions

What is the Medi-Cal asset limit in 2027?

Through June 30, 2027 it’s $130,000 for one person and $195,000 for two. Under SB 164 (Welf. & Inst. Code, § 14005.62), it’s scheduled to drop to $21,000 for one person and $31,000 for two, plus $1,550 for each additional person, no sooner than July 1, 2027 and only after federal approval and DHCS systems certification.

What is the federal estate tax exemption for 2027?

$15,480,000 per person for decedents dying in 2027, under Rev. Proc. 2026-35. The annual gift exclusion is $20,000 per recipient.

Is my old California power of attorney still valid after the new form takes effect?

Yes. AB 2199 replaces the statutory form in Prob. Code, § 4401 starting January 1, 2027, and nothing in it voids a power of attorney signed on the earlier form.

When does the Prop 19 exclusion amount change?

The current adjusted amount, $1,044,586, applies to transfers from February 16, 2025 through February 15, 2027. The Board of Equalization sets a new figure for transfers on or after February 16, 2027.