# A parent with dementia, a living trust, and Medi-Cal in 2026 > A parent with dementia, a living trust, and land that isn't the home. How Medi-Cal counts it in 2026, the $21,000 limit in 2027, and eight strategies graded. Source: https://ridleylawoffices.com/medi-cal-dementia-living-trust-strategy/ Medi-Cal strategy guide · California A living trust doesn’t become irrevocable when a parent develops dementia. Even if it did, Medi-Cal would still count everything in it. By Eric Ridley · Updated October 2, 2026 · Rules current through DHCS letter ACWDL 26-16 (September 17, 2026) A parent has advanced dementia and a revocable living trust. The trust holds the home and one other piece of real estate, often a lot or a rental. Nobody signed a durable power of attorney before it was too late. And Medi-Cal changed its rules twice in two years, with a third change already written into law for July 2027. This guide follows one of those families from start to finish: how Medi-Cal counts what the parent owns, which popular beliefs are wrong, every strategy worth considering with a grade on each, and the plan I’d build. Every rule cites the statute, regulation, or DHCS letter it comes from, listed at the end. **Where I fit.** I don’t file Medi-Cal applications. My practice is limited to estate planning, trust administration, and uncontested probate, and this guide is written from the trust side: what the trust allows, what the trustee can sign, and what happens at death. For the application itself, I refer families to an elder-law attorney who does this work every week, at no charge to you. $130,000 Asset limit for one person today $21,000 The limit at the first renewal after July 1, 2027 30 months Nursing home look-back, phasing in through mid-2028 $14,440 2026 monthly divisor for transfer penalties ### The short answer - Assets in a revocable trust count for Medi-Cal, and a parent’s incapacity doesn’t change that. California law treats the trust as still revocable, and Medi-Cal counts an irrevocable trust’s assets too when they can be used for the parent. - The home in the trust stays exempt if the parent declares, in writing, an intent to return to it. Other real estate counts at its **assessed value** from the property tax roll, which is often far below what it would sell for. - The asset limit drops to **$21,000 no sooner than July 1, 2027**. People already on Medi-Cal hit the new limit at their first renewal after that date. - A transfer made while the parent is under the limit isn’t penalized. That window closes at the 2027 renewal, which makes the next nine months the planning period. **In this guide** 1. The example family 2. How Medi-Cal counts what he owns 3. The clock 4. Beliefs that cost families money 5. The strategies side by side 6. Each strategy, graded 7. Running the scenarios 8. Choosing a path 9. The plan I’d build 10. The first 30 days 11. Frequently asked questions 12. Sources ## The example family This family is fictional. It’s assembled from situations I see in consultations, and the names, places, people, and figures are invented. The numbers are realistic enough to test every rule against. **The parent** A widowed father with advanced dementia, living in an assisted living home. Hospice is ending because he’s stable, and skilled nursing is likely next. **His trust** A standard revocable living trust. His son, an only child, is the successor trustee and the only beneficiary. **The home** A house held in the trust, worth about $650,000. No mortgage. The roof needs replacing. **The lot** A hillside lot in the trust, bought in the 1990s for about $40,000. Assessed at about $98,000. The family thinks it would sell for around $220,000, slowly. **Cash** About $24,000 in a checking account in his own name. **Paperwork** An advance health care directive. No durable power of attorney for finances. **Who’s paying** The son and his wife pay the assisted living bill every month out of their own pocket. **The worry** Skilled nursing at roughly $15,000 a month, and the $21,000 limit in 2027. ## How Medi-Cal counts what he owns Medi-Cal looks through the trust. For a revocable trust, the regulation counts the trust’s income and principal as available to the person who holds the power to revoke it, which is him. The house and the lot are treated as if he owned them outright (22 CCR § 50489.5(e)(1)). That’s why [a living trust doesn’t help with eligibility](https://ridleylawoffices.com/medi-cal-living-trust-2026/), even though it does a great deal at death. The house is exempt as his principal residence if he declares in writing that he intends to return home, and the regulation says that holds “for any reason, including admittance to LTC” (22 CCR § 50425(c)(3)). His representative signs that declaration for him. Whether he’s medically likely to go home doesn’t enter into it. Holding the house in a trust doesn’t cost him the exemption, because a trust can’t make him ineligible to the extent it holds exempt property (22 CCR § 50489.5(h)(5)). [The home has its own guide.](https://ridleylawoffices.com/protect-house-from-medi-cal-california/) The lot is “other real property,” and it counts. For California real estate, the regulation sets market value at **the assessed value on the most recent property tax assessment**. The family can substitute a qualified appraisal, but only when the appraisal comes in lower (22 CCR § 50412(a)). Net market value is that figure minus any recorded loans or liens against the property (22 CCR §§ 50413, 50415). Thanks to Proposition 13, land owned for decades usually carries an assessed value far below its sale price. How Medi-Cal sees his trust, and his bank account House $650,000 Exempt Written intent to return home is on file (22 CCR § 50425(c)(3)). Hillside lot $98,000 Counts At assessed value, not the $220,000 the family expects (22 CCR § 50412(a)). Checking (outside the trust) $24,000 Counts Every dollar, after the month the money arrives (22 CCR § 50453). Countable today, against a $130,000 limit **$122,000** Countable assets against the limit Lot at assessed value ($98,000) Cash ($24,000) Asset limit **Today** $122,000 of $130,000 $130k Eligible, with about $8,000 of room **First renewal after July 1, 2027** $122,000 against $21,000 $21k Over the limit by about $101,000 Scale runs from $0 to $150,000. If the county counted the lot at the family’s $220,000 estimate, he’d be over the limit today. The regulation doesn’t allow that, so bring the current property tax bill to the application. ## The clock Asset limit for one person, July 2022 onward **$130,000** **No limit** **$130,000** **$21,000** Jul 2022 to Dec 2023 2024 and 2025 Jan 2026 to Jun 2027 Jul 2027 on Column widths follow the number of months in each period. The 2027 column starts no sooner than July 1, 2027. How many months of transfers the county reviews, by application date **6** **9** **12** **18** **24** **30** Jul 2026 **Oct 2026** Jan 2027 Jul 2027 Jan 2028 Jul 2028 Months from 2024 and 2025 are never reviewed. Source: ACWDL 25-18 chart. More detail in [the look-back phase-in guide](https://ridleylawoffices.com/medi-cal-look-back-phase-in-california/). - January 1, 2024 to December 31, 2025No asset test. DHCS has told counties not to review or penalize any transfer made in these two years, whenever the person applies (ACWDL 25-18; ACWDL 26-03). - January 1, 2026The asset test returns at $130,000 for one person and $65,000 for each additional household member (AB 116, Stats. 2025, ch. 21; ACWDL 25-14). The 30-month look-back for nursing home care returns with it. - Now through mid-2028The look-back phases in. An application filed in October 2026 is reviewed only for transfers from January through September 2026. One month is added each month until the full 30 months applies to applications filed on or after July 1, 2028 (ACWDL 25-18). - No sooner than July 1, 2027The limit drops to $21,000 for one person, $31,000 for two, and $1,550 for each additional person. DHCS can’t start until its systems are programmed and it has federal approval (Welf. & Inst. Code § 14005.62, as enacted by SB 164, Stats. 2026, ch. 27, § 69). - His first annual renewal after that dateThat’s when the $21,000 limit reaches someone already enrolled (Welf. & Inst. Code § 14005.62(b)). If he enrolls in November 2026, his renewal falls around November 2027. The 2027 reduction is enacted law, not a proposal. It could still be delayed or repealed before it takes effect. I don’t plan around what a legislature might do. Plan on the law as written and treat any delay as a bonus. [The asset limit guide](https://ridleylawoffices.com/medi-cal-asset-limit-california/) tracks the details. ## Beliefs that cost families money | What families believe | | What the law says | | --- | --- | --- | | “The trust became irrevocable when Dad lost capacity, so Medi-Cal can’t count it.” | Wrong | The Probate Code describes this exact situation, a trust “during the time that a trust is revocable” when no one holding the power to revoke “is competent,” and never calls it irrevocable (Prob. Code § 15800(b)). Nobody can exercise the power to revoke, because an agent can’t revoke or amend a trust unless the trust expressly allows it (Prob. Code §§ 15401(c), 4264(a)). For Medi-Cal the label doesn’t matter anyway. An irrevocable trust counts to the extent any payment “can be made from the trust to, or for the benefit of” him “at any time or under any circumstances” (22 CCR § 50489.5(f)(1)). See [revocable versus irrevocable](https://ridleylawoffices.com/revocable-vs-irrevocable-trust-california/). | | “We’ll describe the trust as irrevocable on the application and leave the lot off.” | Don’t | The county reads the trust documents (22 CCR § 50489(e)(1)). Leaving off an asset you know about is the one move in this guide that turns a benefits problem into a fraud problem. The penalty math below shows the lawful fallback costs months, not everything. | | “If we sell the lot, he gets a penalty.” | Wrong | A sale at fair value isn’t penalized. He traded land for cash of equal value (22 CCR § 50408(a)(3)). The cash counts, dollar for dollar, the month it lands. Penalties come from gifts and below-value sales. See [giving assets away to qualify](https://ridleylawoffices.com/can-i-give-away-assets-to-qualify-for-medi-cal-california/). | | “Medi-Cal will take the house when he dies.” | Wrong | For deaths on or after January 1, 2017, recovery is limited to the probate estate (Welf. & Inst. Code § 14009.5(f)(3), (g)). A funded trust keeps the house and the lot out of probate. The exposure is anything left outside the trust, like his checking account. See [recovery against a trust](https://ridleylawoffices.com/medi-cal-recovery-trust-california/) and [whether a trust is actually funded](https://ridleylawoffices.com/is-my-living-trust-funded-california/). | ## The strategies side by side Each grade is what I’d tell this family across the table, including where a popular idea falls apart. | Strategy | Up-front cost | Legal risk | Protects at 2027 renewal | Keeps basis step-up | Needs a court | Grade | | --- | --- | --- | --- | --- | --- | --- | | 1. Qualify now | ●○○○ | ●○○○ | No | Yes | No | Do first | | 2. Move the lot out before renewal | ●●●○ | ●○○○ | Yes | No | Unless trust allows | Strongest | | 3. Listed-for-sale rule | ●○○○ | ●●○○ | Probably | Yes | No | Backup | | 4. Family loan on the lot | ●●○○ | ●●○○ | Partly | Yes | No | Add-on | | 5. Family buys at assessed value | ●●●○ | ●●●○ | Partly | No | Advised | Aggressive | | 6. Sell and spend down | ●●●● | ●○○○ | Yes | No | No | If land is a burden | | 7. Community-care track | ●○○○ | ●○○○ | No | Yes | No | Situational | | 8. Call it irrevocable, omit the lot | ○○○○ | ●●●● | No | n/a | n/a | **Don’t** | ## Each strategy, graded Strategy 1 ### Qualify him now, on today’s rules Do this first How it works Apply now with the lot at assessed value and the intent-to-return declaration on file. Countable assets come to about $122,000, under the $130,000 limit. Spend the spare cash on things the rules exempt or that he needs anyway, which buys margin. An irrevocable prepaid funeral plan is exempt in full (22 CCR § 50479(a)). A new roof on the exempt house turns countable cash into exempt value. More options are in [the share of cost and spend-down guide](https://ridleylawoffices.com/guides/medi-cal-share-of-cost-california/) . What it costs Very little. The application, the tax bill, and a physician’s letter confirming incapacity under the trust’s own definition. Where it breaks It solves 2026 and leaves 2027 alone. His margin is thin, and income left sitting in his account past the month it arrives starts counting as property. Verdict Necessary and not sufficient. Every other strategy assumes he’s already enrolled. Strategy 2 ### Move the lot out before the 2027 renewal, while he’s under the limit Strongest protection How it works A transfer isn’t penalized when the property, counted in his reserve at the time of the transfer, wouldn’t have made him ineligible (22 CCR § 50408(a)(2)). DHCS defines a disqualifying transfer as one made while the person was over the asset limit (ACWDL 25-18). At about $122,000 against a $130,000 limit, a gift of the lot to his son today falls outside the penalty rules. Done after the 2027 renewal, the same gift costs months of coverage. Who can sign A trustee managing a trust for the parent’s benefit generally can’t give trust property to himself, and doing so is self-dealing (Prob. Code § 16004(a)). Read the trust first. Some trusts let the trustee make gifts during the settlor’s incapacity or do public-benefits planning. If this one doesn’t, the route is a conservatorship of the estate and a court petition for substituted judgment, which lets a court authorize gifts and changes to a revocable trust on the parent’s behalf (Prob. Code § 2580(b)(1), (b)(11)). A [durable power of attorney with gifting powers](https://ridleylawoffices.com/power-of-attorney-for-parents/) would have made this a signature instead of a lawsuit. What it costs If the trust allows it, a deed. If it doesn’t, a court case that takes months, plus legal fees. Then the tax. A gift carries his $40,000 basis to his son (26 U.S.C. § 1015). Inherited property gets a new basis at its value on the date of death (26 U.S.C. § 1014). On a lot worth $220,000, the gift gives up a basis increase of about $180,000, and the federal and California tax on that gain could run roughly $40,000 to $60,000 when the son sells, depending on his income. Have a CPA run the actual number. [How the step-up works.](https://ridleylawoffices.com/stepped-up-basis-california-trust/) The lot gets reassessed for property tax either way, because [Proposition 19](https://ridleylawoffices.com/prop-19-parent-child-exclusion-california/) limits the parent-child exclusion to the family home. Where it breaks The deadline. A conservatorship started in spring 2027 may not finish before the renewal. If he dies before mid-2027, the family paid the fees and gave up the basis increase for nothing. Verdict The most durable answer, and worth it when the trust already authorizes the gift or he’s expected to live well past 2027. Start by spring 2027 at the latest. Strategy 3 ### Keep the lot and use the listed-for-sale rule at the 2027 renewal Good backup How it works Other real property gets a six-month “utilization period” after the county’s notice. That period “shall be extended for as long as the property is listed for sale” if the county finds sale is the only way to put the land to use, the land is listed with a licensed broker at its Medi-Cal market value, and the family reports to the county every six months on offers and advertising (22 CCR § 50416(c), (e)). County handbooks treat the property as unavailable while every requirement is met, and unavailable property isn’t counted (22 CCR § 50402). What it costs A listing agreement and an appraiser’s statement on value and income potential. The lot stays in the trust and gets the full basis increase at his death. Where it breaks Two ways. The listing price is tied to the Medi-Cal market value, which is the assessed value (22 CCR § 50416(e)(2)). A $220,000 lot listed near $98,000 may sell quickly, and then the trust holds cash that counts. And the rule leaves room for the county’s judgment, so ask for its determination in writing. A separate provision exempts only the first $6,000 of other real property when it’s put to use by earning income (22 CCR § 50427), so leasing the lot won’t solve the problem. Verdict The cheapest way to carry the lot past July 2027, and fragile. Prepare the file now so it’s ready at the renewal. Strategy 4 ### The family’s payments become a loan secured by the lot Useful add-on How it works The family is already paying for his care. If those payments are a loan to the trust, secured by a recorded deed of trust on the lot, the debt reduces the lot’s net market value dollar for dollar (22 CCR §§ 50413, 50415). Repaying the loan later is a transfer “to satisfy a legal debt,” which counts as fair value (22 CCR § 50408(a)(3)(A)). The trustee has statutory power to borrow for any trust purpose (Prob. Code § 16241). Requirements A written promissory note signed by the trustee, interest at least at the IRS applicable federal rate, a recorded deed of trust, and a ledger with a receipt for every dollar advanced. Advance as you go. A note for future care that never gets paid is the kind of paper a county reads as a gift. Where it breaks Money already paid is the weak spot. Reimbursing someone for past care counts as fair value only if the care was given “on the basis of an agreement or understanding that reimbursement would be made,” and the family has to prove that with clear evidence (22 CCR § 50408(a)(3)(B)). Payments made as gifts don’t become a debt because the family later writes a note. Adult children aren’t legally responsible for a parent’s care, which helps them here (22 CCR § 50351(a)). When the lender is the trustee or the trustee’s spouse, the conflict invites scrutiny (Prob. Code § 16004). Interest the family receives is taxable income to them. The idea that the lien beats estate recovery adds nothing, because trust property is already outside recovery. Verdict Sound for payments going forward, and weak for money already spent. At the pace an assisted living bill runs, it won’t erase $98,000 of lot value by mid-2027 on its own. Pair it with Strategy 2 or 3. Strategy 5 ### The family buys the lot at its Medi-Cal value Aggressive, read the risks How it works Medi-Cal defines fair market value for California real estate as the assessed value (22 CCR §§ 50408(a)(3), 50412(a)). A sale from the trust to a family member at that price is, on the face of the regulation, a sale for adequate consideration. The trust ends up with about $98,000 in cash to pay for his care, and the family ends up with the lot. Where it breaks The cash counts the month it arrives, so this works only paired with spending it on his care. A trustee selling to himself or his spouse is self-dealing and needs court approval or a strong record (Prob. Code § 16004). Federal law and DHCS could read “fair market value” as what the land would actually bring, and nobody has tested the assessed-value argument against a family purchase under the 2026 rules. The IRS will treat the gap between price and real value as a gift. Verdict Supported by the regulation’s text and untested in practice. I’d only consider it with court instructions approving the sale. Strategy 6 ### Sell the lot on the open market and spend down Only if the land is a burden How it works Sell for $220,000. He’s over the limit until the proceeds are spent on his care or on exempt items, and the spending has to happen by the end of the month eligibility is set (22 CCR § 50420(c); ACWDL 25-14). What it costs The most of any option. The family’s share shrinks by whatever goes to care at private-pay rates, the gain is taxed during his life with no basis increase, and the lot is gone. See [capital gains on inherited property](https://ridleylawoffices.com/capital-gains-inherited-property-california/) for what waiting would have saved. Verdict Worth it only if the land is a liability: fire exposure, a bad neighbor, taxes the family can’t carry. Otherwise it spends the inheritance to solve a problem the regulations offer cheaper ways around. Strategy 7 ### Stay on the community-care track Depends on his care How it works The transfer penalty applies only to nursing facility level of care. DHCS says it “does not apply to Medi-Cal members enrolled in community-based Medi-Cal programs” (ACWDL 25-18). The Assisted Living Waiver pays for care services in a participating assisted living home. It doesn’t pay room and board, it requires full-scope Medi-Cal with no share of cost, it operates in 15 counties, and it has a waitlist (DHCS Assisted Living Waiver page). Where it breaks The asset limit still applies. And a gift made while he’s in assisted living comes back into the look-back if he enters a skilled nursing facility within 30 months. For a parent whose next stop is probably skilled nursing, this buys time and nothing more. Verdict Apply if his county and his assisted living home participate, because it pays for real care now. Don’t build the land plan around it. Strategy 8 ### Call the trust irrevocable and leave the lot off Don’t Why families try it The trust feels locked, and “irrevocable trusts don’t count” is everywhere online. Why it fails California law says the trust is still revocable (Prob. Code § 15800(b)). Medi-Cal counts it even if it weren’t (22 CCR § 50489.5(f)(1)). The county reads the trust (22 CCR § 50489(e)(1)). The best case is a denial and a bill for benefits paid. The worst case is a fraud referral on an application the son signed. Verdict Every lawful strategy above beats this, including the penalty. ## Running the scenarios The right strategy depends on something no one controls, which is how long he lives. With advanced dementia, the realistic range runs from a few months to several years. | Approach | He dies before mid-2027 | He lives into 2028 | He lives several more years | | --- | --- | --- | --- | | **1 only**: qualify now, do nothing else | Best result. Coverage, no planning cost, full basis increase. | Loses eligibility at the 2027 renewal, about $101,000 over. | Same, plus private pay or a penalty. | | **1 + 2**: move the lot before renewal | Wasted fees, and a lost basis increase worth roughly $40,000 to $60,000. | Protected. | Protected. The tax cost is fixed while the care it protects keeps adding up. | | **1 + 3**: listed-for-sale rule at renewal | No cost. Nothing to unwind. | Probably holds if the county agrees and the lot doesn’t sell. | Holds while unsold. County review every six months. | | **+ 4**: loan going forward | Family repaid first from the trust. | Shrinks the gap without closing it. | Grows with every month of care. | ### If nothing works: the penalty | Gift of the lot after the $21,000 limit applies | $98,000 | | --- | --- | | Portion over the limit (cash alone already exceeds it) | $98,000 | | Divided by the 2026 divisor (ACWDL 26-03) | ÷ $14,440 | | Result before dropping the fraction (ACWDL 25-18) | 6.79 | | Months without nursing home coverage | 6 | About $90,000 of private pay at $15,000 a month, and the 2027 divisor will differ. Only the part of a gift that pushed him over the limit counts (22 CCR § 50411(b)). Before DHCS approves any penalty, the county must check for undue hardship, and one listed circumstance is a person “otherwise eligible for the Medi-Cal program and unable to obtain home and facility care without Medi-Cal” (Welf. & Inst. Code § 14015.1(b)(4)). Don’t plan around hardship. Raise it if a penalty is proposed. ### The tax trade in Strategy 2 | Lot value today | $220,000 | | --- | --- | | Basis if gifted now (26 U.S.C. § 1015) | $40,000 | | Basis if inherited (26 U.S.C. § 1014) | $220,000 | | Gain given up by gifting | $180,000 | | Estimated tax on that gain | $40k to $60k | Against nursing home coverage worth about $15,000 a month, the gift pays for itself after three to four months of coverage it saves, before legal fees. The estimate assumes federal capital gains rates of 15% to 23.8% plus California income tax. Have a CPA run the son’s actual numbers. ## Choosing a path Is he under $130,000, counting the lot at assessed value? ↓ Yes Apply now with the intent-to-return declaration (Strategy 1). Start the loan ledger for every payment going forward (Strategy 4). No Spend down on exempt items by the end of the month first: the roof, a prepaid funeral, his own bills (Strategy 1). Then apply. ↓ Does the trust let the trustee make gifts or do benefits planning? ↓ Yes Deed the lot out before the 2027 renewal (Strategy 2) after a CPA prices the lost step-up. No Go to the next question. ↓ Is he expected to live well past mid-2027? ↓ Likely Start a conservatorship and substituted judgment petition by spring 2027 (Strategy 2), through conservatorship counsel. Uncertain or unlikely Prepare the listed-for-sale file for the renewal (Strategy 3). The penalty is the fallback, never leaving the lot off. ## The plan I’d build for this family 1. This month**Confirm the trustee’s authority and apply.** Get the incapacity letters the trust requires, send the beneficiary notice the Probate Code requires within 60 days (Prob. Code § 15800(b)(1)), and file the Medi-Cal application with the property tax bill and the written intent-to-return declaration. [What a successor trustee does.](https://ridleylawoffices.com/what-does-a-successor-trustee-do-california/) 2. This month**Put the family’s payments on paper going forward.** Promissory note at the applicable federal rate, recorded deed of trust on the lot, and a running ledger with receipts. Separately, pull together whatever shows the family expected repayment for what they’ve already paid. 3. Within 60 days**Read the trust for gift and benefits-planning powers.** If the trustee can make gifts during incapacity, the lot can move before the renewal with a deed, and Strategy 2 becomes cheap. 4. By early 2027**Make the call on the lot.** If the trust doesn’t authorize the gift, weigh his prognosis against the cost of a conservatorship and the lost basis increase. If he’s expected to live well past 2027, start the court process by spring. If not, prepare the listed-for-sale file instead. 5. At the first renewal after July 1, 2027**Run whichever plan is in place.** Either the lot is already out, or the appraisal, the listing, and the county’s written determination go in with the renewal. For this family my recommendation is Strategy 1 now, Strategy 4 for every payment from here on, and Strategy 3 ready for the renewal. If the trust permits a gift, Strategy 2 becomes the plan. Strategy 2 by court petition is the right call only if he’s expected to live long enough for the protected care to cover the tax and the fees. ## The first 30 days - Find the trust, every amendment, and the deeds to the house and the lot. Confirm both deeds name the trustee. - Read the trust’s incapacity clause and get the physician letters it calls for. - Get the current property tax bills for both parcels. - Check how his bank account is titled. If it’s outside the trust with no payable-on-death designation, it’s the one asset estate recovery could reach. - Price an irrevocable prepaid funeral plan and get the roof bid. - Ask the assisted living home whether it participates in the Assisted Living Waiver. - Have a CPA estimate the gain on the lot at today’s value. - Start the loan ledger and keep every receipt from here forward. - Line up an elder-law attorney for the application. [How to pick one.](https://ridleylawoffices.com/tips-for-selecting-an-elder-law-attorney-in-ventura-county/) ## Frequently asked questions ### Does a living trust protect assets from Medi-Cal? From eligibility, no. Medi-Cal counts a revocable trust’s assets as the settlor’s (22 CCR § 50489.5(e)(1)). From estate recovery after death, yes. Recovery reaches only the probate estate, and trust assets aren’t in it (Welf. & Inst. Code § 14009.5(f)(3)). More in [does a living trust protect assets from nursing home costs](https://ridleylawoffices.com/does-a-living-trust-protect-assets-from-nursing-home-california/). ### Does a revocable trust become irrevocable when the person who made it gets dementia? Not under California law. The Probate Code describes a revocable trust whose settlor is no longer competent and keeps calling it revocable (Prob. Code § 15800(b)). The trust becomes irrevocable at death, or earlier if its own terms say so. Some trusts do, so read yours. Medi-Cal counts it either way if it can pay for the settlor. Capacity to change a trust is covered in [dementia and trust amendments](https://ridleylawoffices.com/dementia-trust-amendment-capacity-california/). ### Can the successor trustee move assets out to qualify the parent? Only if the trust gives the trustee that power. A trustee’s job during the settlor’s life is to manage the trust for the settlor’s benefit, and giving trust property to yourself is self-dealing (Prob. Code § 16004(a)). Without a power in the trust or a power of attorney that expressly allows it, the route runs through a conservatorship and a court order (Prob. Code § 2580). ### How is real estate other than the home valued? At the assessed value on the latest property tax bill, minus recorded loans against it. The family can use an appraisal instead, but only if it’s lower (22 CCR §§ 50412(a), 50415). ### Is the $21,000 limit really happening? It’s enacted. SB 164 rewrote Welf. & Inst. Code § 14005.62 to set $21,000 for one person and $31,000 for two, operative no sooner than July 1, 2027 and only after DHCS programs its systems and gets federal approval. People already enrolled face it at their first renewal after that date. ### What does the look-back cover right now? Transfers made in 2024 and 2025 are never penalized. For an application in October 2026, the county reviews transfers from January through September 2026. The window grows a month at a time until it reaches the full 30 months in July 2028 (ACWDL 25-18). ### Does the look-back apply to in-home care or assisted living? No. The transfer penalty applies to nursing facility level of care only (ACWDL 25-18). The asset limit itself still applies to those programs. ### Will Medi-Cal put a lien on the house? California limits recovery to the probate estate for deaths on or after January 1, 2017 (Welf. & Inst. Code § 14009.5(f)(3), (g)). A house held in a funded trust passes outside probate. See [estate recovery after 2026](https://ridleylawoffices.com/medi-cal-estate-recovery-ab-116-2026/). ### Does Ridley Law handle the Medi-Cal application? No. My practice is limited to estate planning, trust administration, and uncontested probate. I’ll review the trust and tell you what it allows, and I’ll refer you to an elder-law attorney for the application at no charge to you. ## Related guides [**All Medi-Cal guides**The full library, in one place.](https://ridleylawoffices.com/medi-cal-guides/) [**The asset limit**2026 numbers and the 2027 drop.](https://ridleylawoffices.com/medi-cal-asset-limit-california/) [**The look-back phase-in**Month by month through 2028.](https://ridleylawoffices.com/medi-cal-look-back-phase-in-california/) [**A parent entering skilled nursing**The 30 days before the application.](https://ridleylawoffices.com/parent-entering-nursing-home-medi-cal-2026/) [**Giving assets away to qualify**How penalties are calculated.](https://ridleylawoffices.com/can-i-give-away-assets-to-qualify-for-medi-cal-california/) [**Will Medi-Cal take the house?**The home, eligibility, and recovery.](https://ridleylawoffices.com/protect-house-from-medi-cal-california/) [**Living trusts and Medi-Cal**What a trust does and doesn’t do.](https://ridleylawoffices.com/medi-cal-living-trust-2026/) [**Medi-Cal planning and elder law**When you need an elder-law attorney.](https://ridleylawoffices.com/medi-cal-planning-elder-law-california/) [**Incapacity planning**The documents that prevent most of this.](https://ridleylawoffices.com/incapacity-planning-california/) [**Two-minute asset screener**Check where a parent stands.](https://ridleylawoffices.com/medi-cal-asset-screener/) ## Sources 1. Welf. & Inst. Code § 14005.62, as amended by SB 164 (Stats. 2026, ch. 27, §§ 68, 69). [leginfo.legislature.ca.gov](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=WIC§ionNum=14005.62) 2. DHCS ACWDL 25-14, Reinstatement of the asset limit (June 30, 2025). [dhcs.ca.gov](https://www.dhcs.ca.gov/wp-content/uploads/2025/10/25-14.pdf) 3. DHCS ACWDL 25-18, Transfers of assets for long-term care Medi-Cal (October 9, 2025). [dhcs.ca.gov](https://www.dhcs.ca.gov/wp-content/uploads/2025/12/25-18.pdf) 4. DHCS ACWDL 26-03, 2026 statewide average private pay rate of $14,440 (February 9, 2026). [dhcs.ca.gov](https://www.dhcs.ca.gov/wp-content/uploads/2026/04/26-03.pdf) 5. DHCS ACWDL 26-16, Asset limits for the Pickle, DAC, and DW programs (September 17, 2026). [dhcs.ca.gov](https://www.dhcs.ca.gov/wp-content/uploads/2026/09/ACWDL-26-16.pdf) 6. Cal. Code Regs., tit. 22, § 50402 (unavailable property). [law.cornell.edu](https://www.law.cornell.edu/regulations/california/22-CCR-50402) 7. Cal. Code Regs., tit. 22, §§ 50408, 50409, 50411 (transfers, presumption, period of ineligibility). [law.cornell.edu](https://www.law.cornell.edu/regulations/california/22-CCR-50408) 8. Cal. Code Regs., tit. 22, §§ 50412, 50413, 50415 (market value, encumbrances, net market value). [law.cornell.edu](https://www.law.cornell.edu/regulations/california/22-CCR-50412) 9. Cal. Code Regs., tit. 22, §§ 50416, 50427 (utilization of other real property, listed-for-sale extension). [law.cornell.edu](https://www.law.cornell.edu/regulations/california/22-CCR-50416) 10. Cal. Code Regs., tit. 22, § 50420 (property limit, spend-down within the month). [law.cornell.edu](https://www.law.cornell.edu/regulations/california/22-CCR-50420) 11. Cal. Code Regs., tit. 22, § 50425 (principal residence, intent to return). [law.cornell.edu](https://www.law.cornell.edu/regulations/california/22-CCR-50425) 12. Cal. Code Regs., tit. 22, § 50453 (bank accounts). [law.cornell.edu](https://www.law.cornell.edu/regulations/california/22-CCR-50453) 13. Cal. Code Regs., tit. 22, § 50479 (burial funds). [law.cornell.edu](https://www.law.cornell.edu/regulations/california/22-CCR-50479) 14. Cal. Code Regs., tit. 22, §§ 50489, 50489.5 (trusts). [law.cornell.edu](https://www.law.cornell.edu/regulations/california/22-CCR-50489.5) 15. Cal. Code Regs., tit. 22, § 50351 (responsible relatives). [law.cornell.edu](https://www.law.cornell.edu/regulations/california/22-CCR-50351) 16. Welf. & Inst. Code § 14009.5 (estate recovery limited to the probate estate). [leginfo.legislature.ca.gov](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=WIC§ionNum=14009.5) 17. Welf. & Inst. Code § 14015.1 (undue hardship). [leginfo.legislature.ca.gov](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=WIC§ionNum=14015.1) 18. Prob. Code § 15800 (rights and notice while a trust is revocable). [leginfo.legislature.ca.gov](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=PROB§ionNum=15800) 19. Prob. Code §§ 2580, 4264, 15401, 16004, 16241. [leginfo.legislature.ca.gov](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=PROB§ionNum=2580) 20. 26 U.S.C. §§ 1014, 1015 (basis of inherited and gifted property). [law.cornell.edu](https://www.law.cornell.edu/uscode/text/26/1014) 21. DHCS, Assisted Living Waiver. [dhcs.ca.gov](https://www.dhcs.ca.gov/services/long-term-care-alternatives-home-and-community-based-service-options/assisted-living-waiver/) ### Is the trust the question? Whether a trust lets the trustee act, whether it’s funded, and what it does at death is my work. I’ll read it and tell you which of these strategies it allows, and I’ll point you to an elder-law attorney for the application. [Talk to Eric](https://app.lawmatics.com/forms/share/345a2f20-b321-4eed-8a15-db3c88789bd8) Or call [(805) 244-5291](tel:+18052445291) I do not handle conservatorship proceedings. My practice is the planning that avoids them: durable powers of attorney, advance health care directives, and living trusts. If your family already needs a conservatorship, I can refer you to counsel who handles those cases. I don’t handle Medi-Cal applications or eligibility appeals. This guide explains California law as of the date above and isn’t legal advice for your situation. Medi-Cal rules changed three times between 2022 and 2026, and county practice varies. The example family is fictional.