Did California really eliminate the Medi-Cal asset limit?

Yes, for non-MAGI Medi-Cal (which includes the elderly, blind, and disabled categories that cover long-term care). Effective January 1, 2024, California stopped counting assets toward Medi-Cal eligibility for those categories. The change applies to checking and savings, second properties, cash value of life insurance, and almost every other resource. Income is still counted; estate recovery still applies.

Does Medi-Cal estate recovery still exist in California?

Yes, but only against probate estates and only for benefits received at age 55 or older. If the parent dies with assets in a revocable living trust, joint tenancy, or transfer-on-death deed (assets that pass outside probate), Medi-Cal can’t recover from those. This is the central planning move: keep the home and major assets out of probate. Estate recovery is also waived for surviving spouses, minor or disabled children, and in hardship cases.

What is share of cost?

When a person’s monthly income exceeds the Medi-Cal income limit for the applicable program, they have a share of cost: the amount they must pay each month before Medi-Cal pays the rest. For a nursing-home resident, share of cost is typically most of their Social Security and pension income, minus a small personal-needs allowance (currently $35 per month for SNF residents) and minus the allocation to a community spouse if applicable. Share of cost is income-based, and the 2024 asset-limit change didn’t affect it.

Is there still a look-back period for transfers?

California stopped enforcing the transfer-of-assets penalty period for most Medi-Cal long-term care applicants in 2017 due to non-implementation of the federal Deficit Reduction Act (DRA) of 2005. In practice, transfers of money or property within the 30 months before application were no longer being penalized for most cases. With the 2024 asset-limit elimination, transfers are even less relevant for eligibility. Some federal DRA rules around irrevocable-trust transfers can still create issues; an elder-law attorney can evaluate.

Do I still need a Medi-Cal-compliant annuity or life-estate deed?

Less than before, but the tools haven’t disappeared. DRA-compliant annuities (single-premium, immediate, non-assignable, naming the state as residual beneficiary) were used to convert assets into income for the community spouse without triggering transfer penalties. After 2024, they’re less needed for eligibility, but can still be useful for converting principal to income flow. Life-estate deeds remain useful for estate-recovery avoidance, because the property passes outside probate to the remainderman at the parent’s death.

Who should be doing Medi-Cal planning?

A California elder-law attorney. The intersection of Medi-Cal estate recovery, the home, the spouse, the IRS, and the eventual probate is not a generalist’s area. Even a high-quality estate planner who doesn’t specifically practice elder law can miss estate-recovery exposure. The cost of an elder-law engagement (typically $3,000 to $8,000 for a planning package, more for complex estates) is small compared to the recovery that can be avoided.

What’s the difference between Medi-Cal planning and estate planning?

Estate planning manages what happens at death: who inherits, how taxes are paid, whether probate is avoided. Medi-Cal planning manages what happens during a long-term care stay: who pays for the nursing home, how the community spouse is protected, what gets recovered after death. The two overlap (a living trust serves both). But the goals differ. A good elder-law attorney does both at once.

What guidance did DHCS issue on the 2024 change?

DHCS issued All County Welfare Directors Letter (ACWDL) 23-14 in late 2023 directing counties to stop counting assets for non-MAGI Medi-Cal effective January 1, 2024, with subsequent ACWDLs clarifying treatment of resources, retroactive coverage, and pending applications. County eligibility workers were instructed not to request asset verification for the affected categories. Families who were denied or terminated for asset reasons in prior years can ask the county to reopen the case under the new framework.

What does an elder-law attorney actually do in 2026?

Three things mostly. First, structure the estate to keep assets out of probate so Medi-Cal estate recovery has nothing to claim. That means a funded living trust, life-estate or transfer-on-death deeds, coordinated beneficiary designations. Second, evaluate whether the home should stay in the parent’s name (better tax basis at death) or be transferred during life (estate-recovery protection but loss of full step-up). Third, handle the spousal-impoverishment math and fair-hearing requests when one spouse needs nursing-home care and the other stays home. The pre-2024 work of spending down savings or building elaborate irrevocable trusts has largely disappeared.

What are the most common mistakes families make?

Five recur. (1) Transferring the home to children before death, losing the stepped-up basis under IRC § 1014 and creating large capital-gains tax when the children eventually sell. (2) Drafting a living trust but never funding it (no new deed recorded, accounts left in the parent’s individual name). (3) Naming a single adult child as joint owner of a bank account, which creates gift-tax exposure and exposes the account to the child’s creditors. (4) Believing an out-of-state attorney’s advice that the family must wait five years before applying, when California has not enforced the federal look-back for years. (5) Missing the share-of-cost notice and fair-hearing window for the community spouse, locking in a lower monthly maintenance allowance than the family is entitled to.

Should I DIY a Medi-Cal application or use an attorney?

A straightforward application for a single parent with modest assets, post-2024, is often DIY-able with help from CANHR fact sheets, the California Health Advocates online guides, and HICAP (Health Insurance Counseling and Advocacy Program) volunteers. An attorney is worth the cost when there is a community spouse, a home worth more than a few hundred thousand dollars, multiple properties, a small business interest, an existing irrevocable trust drafted under pre-2024 rules, or any meaningful estate-recovery exposure. A $250 to $500 initial consultation can settle which lane to take.

Medi-Cal planning after the 2024 asset-limit removal

What changed on January 1, 2024

California eliminated the asset limit for Medi-Cal in the non-MAGI categories, which includes the long-term care categories for the elderly, blind, and disabled. Before the change, a single applicant could keep only about $130,000 in non-exempt assets; the limit had already risen sharply from the historic $2,000 floor. After the change, there is no asset limit at all for these categories.

For families this means the conversation is no longer about spending savings down. A parent applying for Medi-Cal nursing-home coverage can keep their checking, savings, brokerage account, second property, and cash-value life insurance. Eligibility now turns on income and on residency and medical need, not on accumulated wealth.

What didn’t change

Estate recovery

California Medi-Cal still recovers from the probate estates of Medi-Cal beneficiaries who received benefits at age 55 or older. The Department of Health Care Services (DHCS) Estate Recovery Program files a claim in the probate estate for the amount paid out. Recovery is limited to the probate estate (not the broader gross estate), and there are exemptions: a surviving spouse, a surviving minor child, a surviving child of any age who is blind or disabled, and undue-hardship waivers.

The central planning move, then, is to keep assets out of probate. Common methods:

Revocable living trust holding the home and brokerage accounts
Joint tenancy with right of survivorship (with planning caveats)
Transfer-on-death (TOD) deed for real property under California Probate Code § 5600 et seq.
POD (payable-on-death) designations on bank accounts
Beneficiary designations on brokerage accounts, IRAs, and life insurance

Done right, a parent dies with no probate estate, so estate recovery has nothing to claim against. Done wrong, the family learns about estate recovery six months after the funeral when a DHCS lien letter arrives.

Share of cost

For Medi-Cal applicants whose monthly income exceeds the program’s income limit, share of cost applies. The applicant must contribute a calculated portion of their income each month before Medi-Cal pays. For an SNF resident, the calculation is roughly:

Gross monthly income (Social Security, pension, retirement distributions)
Minus the personal-needs allowance ($35 per month for an SNF resident)
Minus the community-spouse maintenance allowance (if there is a community spouse)
Minus Medicare premiums and other health insurance premiums
= Share of cost (paid to the facility each month before Medi-Cal pays the rest)

Share of cost is the part that didn’t change in 2024. Income still matters. A parent with $4,500 a month in Social Security and pension income still pays most of it to the SNF.

Spousal impoverishment

Federal Medicaid law protects a community spouse (the spouse who stays at home while the other is in a nursing facility) from being impoverished. The community spouse has a Community Spouse Resource Allowance (CSRA) and a Minimum Monthly Maintenance Needs Allowance (MMMNA). These rules still apply in California after the 2024 asset-limit change, primarily for share-of-cost allocation and for cases where federal rules apply. The dedicated spousal impoverishment guide covers this in detail.

The historical look-back, in plain English

Before 2017, California enforced a 30-month look-back for transfers of assets without fair consideration: gifts to family, below-value sales, transfers into irrevocable trusts. A penalty period of Medi-Cal ineligibility was imposed based on the amount transferred. The federal Deficit Reduction Act (DRA) of 2005 extended this to 60 months, but California never implemented the DRA extension, and in 2017 California effectively stopped enforcing the transfer penalty for most long-term care applicants.

With the 2024 asset-limit elimination, transfers are even less relevant for eligibility. There’s little planning benefit to gifting assets to children before applying, because the assets wouldn’t have disqualified the applicant anyway. Transfers can still have tax consequences (loss of stepped-up basis on the home, gift-tax reporting on large transfers), which is the new center of gravity for planning.

DRA-compliant annuities and life-estate deeds

Pre-2024, a DRA-compliant single-premium immediate annuity was a common tool to convert a community spouse’s assets into a stream of income, avoiding the transfer penalty. Post-2024, the eligibility reason for using this tool has largely evaporated, but the cash-flow planning logic can still apply.

A life-estate deed transfers the remainder interest in the home to the children, while the parent keeps a life estate (the right to live in the home for life). At the parent’s death, the home passes to the remaindermen automatically, outside probate, with the children receiving a full stepped-up basis under IRC § 1014 (because the parent retained a life estate). This remains a powerful estate-recovery avoidance tool, though a revocable living trust often accomplishes the same goal with more flexibility.

The pre-2024 world vs. the post-2024 world, in plain language

Before January 1, 2024, qualifying a parent for Medi-Cal long-term care looked like a financial obstacle course. A single applicant could keep about $130,000 in non-exempt assets, and before that limit was raised in stages, the historic floor was $2,000. Families spent months restructuring: opening Medi-Cal-compliant annuities to convert savings into income, signing life-estate deeds, transferring brokerage accounts into the community spouse’s name, sometimes spending real money on dental work or a roof to legitimately reduce countable resources. The work was real and the stakes were large.

After January 1, 2024, that obstacle course is mostly gone for non-MAGI Medi-Cal (the elderly, blind, and disabled categories that cover long-term care). DHCS issued ACWDL 23-14 directing counties to stop counting assets entirely for these categories, with follow-up letters clarifying implementation. A parent with $400,000 in savings, a home, and a brokerage account can apply for Medi-Cal nursing-home coverage today and be evaluated on income and medical need, not on what they have saved. For the first time in a generation, the simple answer to “do we have to spend savings down to qualify?” is no.

What remains is narrower and more focused:

Estate recovery against probate estates (still alive, still aggressive in California)
Share of cost based on monthly income (untouched by the 2024 change)
Spousal-impoverishment income allocation when one spouse stays at home
Eligibility for the Assisted Living Waiver (ALW), which uses long-term care Medi-Cal eligibility rules
Coordination with IRS basis rules, Social Security, and California probate law
Federal rules around certain irrevocable-trust transfers

For most California families in 2026, the planning work is much smaller than it was five years ago. The danger is the opposite of what it used to be: not under-planning, but over-engineering based on outdated advice.

When not to over-engineer

Pre-2024 elder-law playbooks called for irrevocable Medicaid-protection trusts, careful asset moves between spouses, annuity ladders, and life-estate deeds as a routine package. In 2026, most of that is unnecessary, and in some cases harmful. Common over-engineering mistakes to avoid:

Transferring the home into an irrevocable trust during life when a revocable living trust now accomplishes the probate-avoidance and estate-recovery goal, and preserves the full stepped-up basis at death under IRC § 1014.
Gifting cash to adult children “to get under the limit” when there is no longer a limit, and the gift creates gift-tax reporting obligations plus exposure to the children’s creditors and divorces.
Buying a Medi-Cal-compliant annuity to convert savings to income when the savings no longer disqualify the applicant. The annuity has real costs and locks up principal that could have stayed liquid.
Following a five-year wait suggested by an out-of-state attorney when California has not enforced the federal look-back for years.

The new center of gravity for planning is much narrower: probate avoidance to defeat estate recovery, a current durable power of attorney, a current advance healthcare directive, beneficiary designations that match the trust, and spousal-impoverishment math when applicable.

What still counts vs. what doesn’t for eligibility

The 2024 change eliminated the asset count for non-MAGI Medi-Cal. Income is still counted, and certain non-financial eligibility criteria still apply. Quick reference:

Category	Counts for eligibility?	Notes
Checking and savings	No (any amount)	Post-2024, balance is irrelevant
Brokerage and investment accounts	No	Post-2024, balance is irrelevant
Primary home	No	Always exempt while occupied; estate-recovery exposure if it passes through probate
Second property, rentals	No	Post-2024, no longer counted; income they generate still counted
Retirement accounts (IRA, 401k)	No (principal)	Required distributions count as income
Cash-value life insurance	No	Post-2024, cash value no longer counted
Vehicles	No	Any number, any value
Social Security, pension, annuity income	Yes	Drives share-of-cost calculation
Investment income, dividends, rent	Yes	Counted monthly
Medical need and California residency	Yes	Both non-financial eligibility criteria

How to actually plan (step by step)

For a family supporting a California parent who may need long-term care now or in the next few years, the practical sequence in 2026 looks like this:

Inventory the assets. Home, second properties, bank accounts, brokerage accounts, retirement accounts, cash-value life insurance, business interests, vehicles, valuable personal property. Note current title, beneficiary designations where applicable, and approximate value.
Pull current documents. Existing will, trust, durable power of attorney, advance healthcare directive, deeds, beneficiary forms. Note the dates: any planning document drafted before 2024 should be reviewed against current Medi-Cal rules.
Estimate income. Social Security, pensions, IRA distributions, rental income, investment income. This drives the share-of-cost calculation, which the 2024 change did not affect.
Identify estate-recovery exposure. Anything that will pass through probate (assets in the parent’s individual name with no POD/TOD designation and no trust) is potentially recoverable by DHCS after death if the parent received Medi-Cal at age 55 or older.
Consult a California-licensed elder-law attorney. Use the State Bar Lawyer Referral Service, NAELA member directory, or CELA certified attorney directory through the National Elder Law Foundation. Initial consultations typically $250 to $500. Bring the inventory.
Fund or update a revocable living trust. If one exists, confirm the home and major accounts are actually titled to the trust (not just listed on a schedule). If one doesn’t exist, draft one and fund it. Drafting typically $2,000 to $6,000 in California.
Update beneficiary designations. Retirement accounts, life insurance, POD bank accounts, TOD brokerage accounts. Coordinate with the trust so nothing falls through.
File the Medi-Cal application when needed. County social services office or online through BenefitsCal. Bring documentation of income, Medicare card, identification, proof of California residency. Asset documentation is no longer required for non-MAGI categories.
Handle the spousal-impoverishment notice if applicable. If there is a community spouse, the county issues a share-of-cost notice. Review the MMMNA calculation and file a fair-hearing request within 90 days if actual shelter costs justify a higher allowance.
Track ACWDL updates annually. DHCS issues new All County Welfare Directors Letters with updated MMMNA figures, personal-needs allowances, and any rule clarifications. Confirm planning is current each year.

Mistakes families make

The most expensive mistakes are usually invisible until much later, when the family realizes something could have been done and wasn’t. The recurring ones:

Transferring the home to children during life. Loses the stepped-up basis at death and can create six-figure capital-gains tax when the children eventually sell. Almost never the right move post-2024.
Drafting a trust and never funding it. The trust document is signed, the binder sits on a shelf, the home is never retitled. At death, the home goes through probate exactly as if no trust existed.
Joint-owning a bank account with one adult child. Creates gift-tax reporting, exposes the account to the child’s creditors and divorces, and creates inheritance inequality among siblings.
Following pre-2024 elder-law advice in 2026. Annuity ladders, gifting plans, and elaborate irrevocable trusts were designed for a different rule set. Old binders need a fresh review.
Missing the share-of-cost or fair-hearing window. The community spouse has 90 days from the share-of-cost notice to request a higher MMMNA. Miss the window and a lower monthly allowance can lock in for the duration of the institutionalized spouse’s stay.
Believing an out-of-state attorney’s five-year wait advice. The federal 60-month look-back is not California’s rule. Acting on it can mean six figures in unnecessary private-pay nursing-home cost.

Questions to ask before hiring an elder-law attorney

The right counsel is worth the fee; the wrong counsel can be worse than no counsel. Before signing an engagement letter:

Are you California-licensed and do you practice California Medi-Cal work routinely?
Are you a member of the National Academy of Elder Law Attorneys (NAELA), or do you hold the Certified Elder Law Attorney (CELA) designation through the National Elder Law Foundation?
How has your practice changed since the January 2024 asset-limit elimination? (A vague answer is a flag.)
What is the flat fee for a planning package vs. hourly billing?
Will you handle the deed recording and account retitling yourself, or does that fall to the family?
Do you handle the Medi-Cal application itself, fair-hearing requests, and estate-recovery responses, or do you refer those out?
How do you coordinate with the tax preparer for basis and gift-tax issues?
What does your engagement cost and what does it include?

The State Bar of California Lawyer Referral Service (calbar.ca.gov) is one starting point, the NAELA member directory another, and the National Elder Law Foundation directory for CELA-designated attorneys a third. CANHR also maintains practitioner referrals focused on California Medi-Cal work.

Why an elder-law attorney, not a general practitioner

Medi-Cal planning involves several overlapping bodies of law: the Medicaid Manual, California Welfare and Institutions Code, California probate law, federal Medicaid rules, IRS basis rules, and Social Security overpayment rules. The interactions are non-obvious. A common general estate planner mistake is putting the home in a revocable living trust to avoid probate, without realizing that revocable-trust assets are still treated as countable for some federal Medicaid rules (though no longer for California eligibility under the 2024 change).

A California elder-law attorney (look for NAELA membership or Certified Elder Law Attorney CELA designation through the National Elder Law Foundation) deals with these intersections daily. Initial consultations are typically $250 to $500; a full planning package runs $3,000 to $8,000, much less than the value of preserved family assets. Talk to a California-licensed elder-law attorney before making transfers, signing deeds, or relying on a trust drafted before 2024.

Related guides and next steps

This guide explains planning options, not legal or financial advice. Talk to a California-licensed elder-law attorney about your specific situation. California Care Compass does not place referrals on Planning pages.

Medi-Cal planning in California: what the 2024 asset-limit elimination changed, and what it didn’t.