The 2026 Medi-Cal "Reset": How California Homeowners Can Protect Their Legacy
For the past two years, California was the only state in the nation without an asset limit for Medi-Cal eligibility. That "Golden Era" of planning ended on January 1, 2026. With the reinstatement of strict asset caps and the return of the 30-month lookback period, middle-class families must once again navigate a complex legal landscape to protect their homes and life savings.
If you are a homeowner or have more than $130,000 in savings, here is the essential breakdown of the new rules and the strategies available to safeguard your estate.
The New (Old) Numbers: Asset Limits Are Back
To qualify for Medi-Cal coverage for long-term care (such as skilled nursing), you must now stay below these countable asset thresholds:
Individuals are limited to $130,000 in countable assets.
Married Couples generally have a combined limit of $195,000.
Larger Households add $65,000 to the limit for each additional qualified household member.
What counts? Cash, stocks, brokerage accounts, second homes, and extra vehicles. What’s exempt? Your primary residence, one car, and household belongings are generally not counted toward these limits while you are alive. Retirement accounts are also typically exempt if you are already taking required minimum distributions (RMDs).
The Return of the 30-Month Lookback
Starting in 2026, California has reinstated a 30-month lookback period for nursing home applications. This means that if you give away assets for less than fair market value within 30 months of applying, Medi-Cal may impose a "penalty period" where you are ineligible for benefits.
Crucially, transfers made during the 2024–2025 "no-limit" window are generally protected and won't trigger penalties. However, any transfers made on or after January 1, 2026, are now subject to full scrutiny.
Avoiding the "Estate Recovery" Trap
Many people believe that if an asset is "exempt" (like their home), it is safe forever. This is a dangerous misconception. While your home might not count against you for eligibility, the State of California can file a claim against your estate after you pass away to reimburse itself for the cost of your care.
The state’s primary tool for this is Probate. If your home goes through a court-supervised probate process, it is vulnerable to estate recovery. If it avoids probate, it is generally safe.
Strategic Tools: Choosing the Right Trust
To protect your legacy, you need to understand which tool fits your specific financial situation.
The Revocable Living Trust (RLT) A standard Living Trust is an excellent tool for Estate Recovery protection. Because it bypasses the probate court, it keeps your home out of the state's reach after you pass away. However, an RLT does not help you qualify for Medi-Cal initially. Since you still have full control and the power to cancel the trust, the state views those assets as yours.
The Medi-Cal Asset Protection Trust (MAPT) For those who have savings or properties that put them over the $130,000 limit, a MAPT is the stronger option. This is an irrevocable trust that effectively "removes" assets from your name for eligibility purposes. While you give up a degree of control, the assets inside are not counted toward the Medi-Cal limit and are also protected from estate recovery after you die.
Why Proactive Planning is Vital
Waiting until a medical crisis hits is the most expensive mistake a family can make. By the time someone needs a nursing home, the 30-month lookback may already be "ticking," and your options for protecting assets may be severely limited.
The Good News: With a properly structured plan, you can meet the 2026 eligibility requirements without losing the home you’ve worked a lifetime to build.
Take the Next Step
The rules have changed, but your goals don't have to. If you want to ensure your home stays in the family and you remain eligible for the care you need, let’s sit down and review your current estate plan.
Disclaimer
This article is provided for educational and informational purposes only and is not intended as, nor should it be construed as, legal advice. Reading this article does not create an attorney–client relationship between you and DeCosimo Law.
Medi-Cal eligibility rules, estate recovery laws, and trust-planning strategies are complex and highly fact-specific. The information discussed above may not apply to your individual circumstances and may change over time due to updates in the law or administrative guidance.
You should not take, delay, or refrain from taking any action based on this information without first consulting with a qualified attorney who can evaluate your specific situation.
If you have questions about Medi-Cal planning, trusts, or protecting your home and legacy, we encourage you to seek personalized legal advice.