Medi-Cal Planning and Elder Law in California

Long-term care is the expense most likely to consume a California family’s savings, and Medi-Cal is the program most families end up relying on. Ridley Law advises on Medi-Cal eligibility, asset protection, and estate recovery across Ventura, Santa Barbara, and Los Angeles Counties.

The three questions families arrive with

Will we qualify? The asset test returned effective 1/1/26 under AB 116 § 59, at $130,000 for an individual and $195,000 for a couple. That is a substantial change from the period when the test was eliminated, and a great deal of advice written during that window is now wrong.

Will the state take the house? California’s estate recovery is limited to the probate estate under SB 833. That is narrower than many states, and it means the planning question is often about keeping the home out of probate rather than about hiding it from anyone.

Is it too late? Usually not entirely. Crisis planning has fewer options than advance planning, but it is rarely true that nothing can be done, and it is rarely true that everything can be.

Timing, and the number most people have wrong

California applies a 30-month look-back to transfers connected to nursing-facility-level care. California has never used the federal five-year period. This matters enormously in practice, because families read national advice, assume five years, and either give up on planning that would have worked or make a transfer on assumptions that do not apply here.

The corollary is that timing is genuinely valuable. Planning done well before a health crisis has options that planning done during one does not.

What we actually do

Assess eligibility against current rules rather than the rules of two years ago. Evaluate which assets are countable and which are exempt. Structure the home so it is protected from recovery, which in California usually means keeping it out of probate through a funded trust, a transfer on death deed, or spousal survivorship, each with different tradeoffs. Advise on permissible spend down versus transfers that create ineligibility. Coordinate with the estate plan so that Medi-Cal planning does not quietly destroy a basis step-up or trigger a property tax reassessment.

That last point deserves emphasis. A great deal of aggressive Medi-Cal planning solves one problem and creates a larger one. Giving a house to children during life may protect it from a risk that never arrives while costing the family a capital gains bill that certainly does, and it may trigger reassessment under Prop 19 as well. The right answer is the one that accounts for all three.

What we will tell you plainly

Some families do not need this planning. Some are already eligible. Some are told they need an irrevocable trust by someone selling one, when the honest answer for a California family is usually that a revocable trust does the work and keeps the step-up.

If someone has quoted you a five-year look-back for California, or told you Medi-Cal will take your house regardless of how it is titled, or that a trust automatically defeats recovery, you have been given advice from another state or another decade.

Related reading

Medi-Cal asset limits in California, share of cost and spend down, protecting the family home, and the Medi-Cal asset screener.

Ridley Law practices California estate planning, trust administration, and probate from Port Hueneme, serving Ventura, Santa Barbara, and Los Angeles Counties.

Frequently Asked Questions

What are the Medi-Cal asset limits in 2026?

$130,000 for an individual, plus $65,000 for each additional household member, so $195,000 for a couple. That was reinstated effective January 1, 2026 by AB 116, after California had eliminated the asset test in 2024. It applies to the non-MAGI programs: aged, blind and disabled, share of cost, 250% Working Disabled, long-term care, and the Medicare Savings Programs. SSI-linked eligibility is still $2,000.

Is the limit about to drop to $21,000?

That’s scheduled, and it isn’t automatic. SB 164 repealed and re-added W&I Code § 14005.62 to set $21,000 individual, $31,000 couple, and $1,550 per additional member, operative no sooner than July 1, 2027. Three conditions sit in front of it: the DHCS director must determine in writing to the Department of Finance that the systems are programmed, federal approval and federal financial participation must be available, and existing beneficiaries aren’t affected until their first annual redetermination on or after the operative date. DHCS’s public page states the date flatly and omits all three.

Will Medi-Cal take our house?

Only through the probate estate. Since SB 833 took effect in 2017, California recovery under W&I Code § 14009.5 reaches only assets that pass through probate. A home held in a fully funded revocable living trust doesn’t go through probate, so it isn’t subject to recovery. That’s a different question from whether the house counts for eligibility, and conflating the two is the most common error I see.

Does a revocable trust help us qualify?

No. Assets in a revocable trust are still yours and still countable for eligibility. The trust defeats recovery, not the asset test. Anyone telling you that moving the house into your living trust makes you eligible is describing something the document does not do.

Is it too late to plan once someone is already in a facility?

Usually not, and the options narrow. Even after admission there are lawful steps: spend-down on exempt items, transfers between spouses, a properly drafted special needs trust for a disabled beneficiary, and in some cases annuities that meet the federal requirements. What changes is that pre-planning options with a long horizon are gone. Getting advice in the first weeks is materially better than getting it in the sixth month.

What will you tell us plainly?

Whether you need planning at all. A meaningful share of families who come in worried about Medi-Cal don’t have an eligibility problem, and what they actually need is a funded trust and current incapacity documents. If that’s your situation, I’ll say so rather than sell you an irrevocable structure you’ll regret when the basis step-up disappears.

See also: what nursing homes, assisted living, and home care cost in California.