Picture this: You spent years building a solid estate plan: a revocable living trust, updated beneficiary designations, and a clear picture of what you’d like to leave behind for your family. Then January 1, 2026 arrived, and California quietly changed the rules on you.
One of the most significant California estate planning changes for 2026 is the return of the Medi-Cal asset test. After California eliminated asset limits in 2024, the state reversed course. If you or a loved one might ever need long-term care, this change matters more than you might think.
At the Law Offices of Daniel A. Hunt, our experienced estate planning attorneys help California families stay ahead of exactly these kinds of shifts. In this post, we’ll break down what the reinstated Medi-Cal asset test means, how it affects your existing estate plan, and what steps you can take right now to protect what you’ve worked so hard to build.
What Is the Medi-Cal Asset Test and Why Did It Come Back?
For most of 2024 and 2025, California eliminated the asset test entirely, meaning the value of your savings, investments, and property didn’t factor into Medi-Cal eligibility. But as of January 1, 2026, California reinstated an asset-based eligibility test for non-MAGI Medi-Cal programs, primarily affecting older adults and individuals with disabilities applying for long-term care Medi-Cal.
The new limits are more generous than the old $2,000 cap: a single person can have up to $130,000 in countable assets, and a married couple can have up to $195,000. Exceed those thresholds, and you’ll be required to “spend down” before Medi-Cal steps in.
These changes stem from California’s AB 133 and AB 118 legislative reforms, modified by the state’s 2025–26 Budget Act. This isn’t a temporary blip; it’s the new landscape.
How the 2026 California Estate Planning Changes Affect Your Existing Plan
Even if you already have a revocable living trust or a comprehensive estate plan, it may not be doing what you need it to do under the new rules.
The biggest misconception: assets in a revocable living trust are still “countable” for Medi-Cal. Because you retain control over a revocable trust, those assets don’t get shielded. Investment accounts, a vacation home, or other non-exempt property inside your trust could still create a spend-down problem.
Another wrinkle: Medi-Cal estate recovery. Even after Medi-Cal pays for long-term care, the state can seek reimbursement from your probate estate after death. Assets passing outside of probate through a properly funded trust can often sidestep this. But your plan has to be set up correctly.
If your estate plan was last updated before 2026, a review is overdue.
What Counts (and What Doesn’t) Under the New Medi-Cal Asset Rules
Exempt (non-countable): Primary residence (while you or your spouse lives there), one vehicle, household goods and personal effects, certain retirement accounts in payout status, prepaid burial plans, and jewelry within reasonable limits.
Countable: Cash, checking and savings accounts, investment accounts, second or vacation homes, additional real estate, extra vehicles, and certain life insurance policies with cash value.
Your primary home is protected while you’re alive, but it’s still vulnerable to estate recovery after death if it passes through probate. How your trust is structured and funded determines whether your heirs keep it.
There’s also a 30-month look-back rule. Transfers made on or after January 1, 2026 can trigger a penalty period if you later apply for Medi-Cal long-term care. Last-minute gifting without legal guidance can create a period of ineligibility right when you need care most.
California Estate Planning Steps to Take Right Now
Review and update your existing estate plan. Make sure your trust is properly funded and that asset categories inside it make sense under the 2026 rules.
Take stock of countable vs. exempt assets. Inventory what you own and how it’s titled. If you’re close to or over the $130,000/$195,000 thresholds, better to know now than during a care crisis.
Be careful with gifts and transfers. Because of the 30-month look-back, transfers made today can affect your Medi-Cal eligibility tomorrow. Don’t give away assets without talking to an attorney first.
Don’t Let a Law Change Catch Your Estate Plan Off Guard
California’s 2026 Medi-Cal changes are real, they’re in effect, and they’re affecting families right now. If you own a home, have savings, or have an estate plan you haven’t revisited recently, it’s worth taking a close look.
At the Law Offices of Daniel A. Hunt, our experienced estate planning attorneys work with California homeowners and families every day to make sure their estate plans actually do what they’re supposed to do: protect their assets, their loved ones, and their legacy.
Contact our firm today to schedule a no-cost initial consultation. Let’s make sure your plan is ready for what 2026 has in store.
Frequently Asked Questions
Q: What are the new Medi-Cal asset limits for 2026 in California?
A: As of January 1, 2026, California reinstated an asset test for non-MAGI Medi-Cal programs. A single person can have up to $130,000 in countable assets, and a married couple up to $195,000. Exempt assets like your primary home, one vehicle, and household goods don’t count toward these limits. Assets above the threshold typically require a “spend down” before Medi-Cal long-term care benefits kick in.
Q: Does my revocable living trust protect my assets from the Medi-Cal asset test?
A: Not for eligibility purposes. Because you retain control over a revocable living trust, those assets are still “countable” under California’s 2026 Medi-Cal rules. However, a properly funded revocable trust can help your estate avoid probate, which matters because Medi-Cal estate recovery is generally limited to probate assets. For true asset protection from Medi-Cal, an irrevocable trust may be worth exploring.
Q: What is the 30-month look-back rule for Medi-Cal in California?
A: California’s Medi-Cal program applies a 30-month look-back period for long-term care eligibility. Transfers or gifts made on or after January 1, 2026 will be reviewed when you later apply for benefits. Certain transfers can trigger a penalty period of ineligibility, which is why gifting assets without professional legal guidance can be risky. Always consult a California estate planning attorney before making significant transfers.
Q: Do I need to update my estate plan because of California’s 2026 estate planning changes?
A: A review is strongly recommended. If your plan was created or last updated before 2026, it may not account for the reinstated Medi-Cal asset test, current look-back rules, or the latest estate recovery guidelines. Even a solid plan can have gaps under new laws. The Law Offices of Daniel A. Hunt offers a no-cost initial consultation, a low-risk way to see if your plan still does what it’s supposed to.
