Retiring near the scenic banks of Folsom Lake or among the historic tree-lined streets of Sacramento offers a peaceful reward after a lifetime of hard work. But as the years pass, the conversation often shifts toward the future of your health and your home. Many families in our community worry that the high cost of nursing homes or assisted living will drain their life savings. You might wonder: How can I secure my legacy and still qualify for the help I need? Asset Protection & Long-Term Care Planning in California is the primary tool we use to help seniors maintain control of their financial future while preparing for the realities of aging.
Care planning involves more than just drafting a will. It requires a deep understanding of how state programs like Medi-Cal interact with your personal property. In 2026, the landscape of these laws has changed significantly, making it more important than ever to have a clear strategy. We believe that by providing clear, accurate information, we can bring you the peace of mind you deserve.
The Reinstatement of Medi-Cal Asset Limits in 2026
For a brief period, California moved toward eliminating asset tests for Medi-Cal eligibility. But as of January 1, 2026, the state has reinstated strict asset limits for those seeking long-term care benefits. This change means that your savings, investments, and even certain types of property are once again under the microscope when you apply for help with nursing home costs.
According to the California Department of Health Care Services, the current asset limit for an individual is $130,000. For a married couple in which both are applying, the limit is $195,000. If your countable assets exceed these amounts, you may be denied coverage until you spend down those resources on your care. Understanding which assets the state counts and which it ignores is the first step toward a successful plan.
What Counts as a Countable Asset in California?
Not everything you own counts against the $130,000 limit. Medi-Cal distinguishes between exempt and countable assets. Countable assets generally include cash in checking and savings accounts; certificates of deposit (CDs) and stocks; and second homes or vacation properties, such as a cabin in the Sierras. Even more than one vehicle per household can count toward your limit.
Exempt assets do not count toward your eligibility. Your primary residence remains exempt if it is your principal place of residence and your equity is below certain state-mandated caps. One vehicle used for medical transportation is also exempt, as are personal effects and household goods. Planning often involves converting countable assets into exempt ones to ensure you meet the eligibility requirements for Medi-Cal.
Protecting Your Family Home from Estate Recovery
The family home is often the most valuable asset for residents in Roseville and Folsom. While your home may be exempt when you apply for Medi-Cal, it is not automatically protected after you pass away. California operates an Estate Recovery Program that seeks to reclaim the costs of your care from your estate.
State law allows Medi-Cal to file a claim against your estate to recover the money they paid for nursing facility services or home-based care. But there is a vital distinction in how this works. Since June 30, 2016, California only recovers from assets that pass through probate. If you structure your estate so that your home bypasses the probate court, you can often protect it from being taken by the state.
We often suggest using a Revocable Living Trust or an Irrevocable Trust to transfer your property out of probate. By doing this, your home can pass directly to your children or beneficiaries without the state ever having the opportunity to file a recovery claim against it.
The California Homestead Exemption in 2026
In addition to trust-based planning, the California Code of Civil Procedure § 704.730 provides a powerful shield for homeowners. This statute creates a homestead exemption that protects a portion of your home equity from most creditors.
For 2026, the homestead exemption amount has been adjusted for inflation. In many parts of Sacramento County, where the median home price has climbed, the exemption can protect up to approximately $743,459 in equity. This means that if a creditor or the state attempts to force the sale of your home, you are entitled to keep that exempted amount of cash from the sale. While this does not solve all Medi-Cal recovery issues, it provides a critical layer of defense for your primary residence.
Using Irrevocable Trusts for Advanced Protection
If you have assets that exceed the $130,000 limit, you might consider an Irrevocable Trust. Unlike a standard living trust, an Irrevocable Trust generally cannot be changed or canceled once it is created. When you place assets into this type of trust, you are essentially removing them from your countable estate.
Under the California Probate Code § 16061.7, specific notice requirements must be met when a trust becomes irrevocable. Using these trusts requires careful timing because of the look-back period. California currently applies a 30-month look-back period for long-term care Medi-Cal. If you give away assets or transfer them into an Irrevocable Trust within 30 months of applying for benefits, the state may impose a penalty period during which you will not receive coverage. Planning ahead is the only way to navigate these timing rules successfully.
Strategic Timing and Asset Transfers
People often ask us about the best way to gift money to children or grandchildren. While gifting is a generous act, it can have serious consequences for your long-term care eligibility. Because of the 30-month look-back rule, we carefully review every transfer of value you make.
Even if you do not feel ready for a nursing home today, a sudden health event can change everything. We focus on proactive planning that accounts for the unexpected. We help you evaluate whether an Irrevocable Medi-Cal Asset Protection Trust is appropriate for your situation. This specialized tool allows you to legally transfer your home or savings out of your name while preserving eligibility for the future.
Navigating Your Future with Confidence
The rules surrounding long-term care are complex, and the 2026 changes have made them even more technical. You have spent your life building your estate, and it is only natural to want to protect it for the people you love. Whether you are worried about Medi-Cal eligibility, estate recovery, or simply want to ensure your home stays in the family, there are legal tools available to help.
At the Law Offices of Daniel A. Hunt, we are consistently driven to provide valuable information to bring peace of mind to our neighbors in Sacramento, Folsom, and Roseville. We focus on creating personalized plans that reflect your values and protect your hard-earned assets.
If you would like to discuss how these 2026 laws affect your specific situation, please contact us at one of our California offices:
Sacramento, CA: 916-545-6854
Roseville, CA: 916-633-7709
Folsom, CA: 916-957-3803 to schedule a consultation.
