One of the more difficult calls I receive begins with a variation of the same question:

“My mother is paying thousands of dollars every month for care. How long does she have to keep doing this before Medi-Cal will help?”

Sometimes the family has already been told that Mom has too much money to qualify for Medi-Cal. Others have heard that she has to spend everything she owns before she can receive assistance, or that she should simply give her assets to her children.

Unfortunately, Medi-Cal planning is rarely that simple.

And in California, it became even more important to get current advice in 2026 because the Medi-Cal asset rules changed again.

California Brought Back the Medi-Cal Asset Test in 2026

For two years, California did not impose an asset limit for Medi-Cal eligibility. That changed on January 1, 2026.

For many applicants who are age 65 or older, disabled, or seeking long-term care Medi-Cal, assets once again matter. Through June 30, 2027, the asset limit is generally $130,000 for one person, with an additional $65,000 for certain additional household members. Different rules and protections can apply to married couples and registered domestic partners.

That does not mean every asset counts toward the limit.

For example, a person’s principal residence generally is not a countable asset for this purpose. One vehicle, household goods and certain retirement funds may also be excluded.

So when a family tells me, “Mom owns a house, so she can’t qualify for Medi-Cal,” my response is that we need considerably more information before reaching that conclusion.

Start With the Care, Not the Assets

Before discussing trusts, gifts or transfers, I want to know what kind of care the person actually needs and where that care is being provided.

Is Mom living independently with caregivers coming into the home?

Is she in assisted living?

Memory care?

A skilled nursing facility?

Those distinctions matter. Medi-Cal is not simply long-term care insurance that reimburses whatever type of care a family chooses.

I also want to know whether this is a current crisis or planning for a possible future need.

If Mom is already receiving skilled nursing care and paying privately, the analysis can be very different from planning for someone who is healthy and living independently.

Don’t Start Giving Away Assets

This is one of the most important points I can make.

Do not begin transferring Mom’s money or property simply because someone told you that she has to “get rid of everything” to qualify for Medi-Cal.

California’s rules concerning transfers and long-term care changed in 2026 along with the return of the asset test. DHCS specifically warns that giving away assets or transferring them for less than fair value can delay long-term-care coverage in circumstances where the transfer rules apply.

A transfer that appears to solve one problem can create another.

There can also be significant consequences completely apart from Medi-Cal, including tax consequences, loss of control over property, creditor issues, and unintended effects on an estate plan.

The right question isn’t:

“How quickly can we get Mom’s assets out of her name?”

It is:

“What does Mom own, what does she need, and what planning is appropriate under the current rules?”

The House Requires Special Attention

The family home is often the asset people worry about most.

As noted above, the principal residence generally is not counted in the same manner as ordinary cash or a bank account for Medi-Cal eligibility.

But eligibility is only part of the analysis.

Families also hear a great deal about Medi-Cal estate recovery, and eligibility and estate recovery are two different issues.

For Medi-Cal recipients who die on or after January 1, 2017, California’s recovery rules generally limit recovery to certain benefits and to assets that are subject to probate at the recipient’s death.

That distinction can make the person’s existing estate plan—and how the residence is titled—very important.

The answer is not automatically to give the house away.

What About an Irrevocable Trust?

Another increasingly common question is whether Mom should immediately transfer everything to an irrevocable trust.

Sometimes irrevocable trusts have a legitimate role in long-term care and estate planning.

But an irrevocable trust is not a magic Medi-Cal box.

Transferring property to an irrevocable trust can involve giving up substantial control over that property. The transfer itself must also be analyzed under the applicable Medi-Cal rules.

Before recommending one, I want to understand what problem we are trying to solve.

If a planning technique imposes substantial restrictions on a client’s property without providing a meaningful benefit under that client’s circumstances, it may be the wrong technique.

A Power of Attorney Can Become Critically Important

One issue families often overlook is whether Mom still has the legal capacity to do any planning herself.

If she does, she may be able to make her own decisions and sign appropriate documents.

If she does not, we need to determine whether someone else already has authority to act for her.

That is one reason a carefully drafted Durable Power of Attorney for financial matters can be so important.

Not every Power of Attorney contains the same powers. Authority involving gifts, trusts and other estate-planning transactions requires particular attention.

A document that works perfectly well for routine banking may not provide all of the authority needed for more sophisticated planning.

And once a person has lost capacity, it may be too late simply to sign a new Power of Attorney.

“Spend Down” Does Not Mean “Waste the Money”

If someone needs to reduce countable assets to qualify for Medi-Cal, that does not necessarily mean giving the money away.

DHCS itself identifies permissible ways an applicant may use assets, including paying medical expenses, a mortgage or rent, debts, home repairs and other personal needs.

The objective should not be to make Mom poor as quickly as possible.

Her assets exist first and foremost for her benefit.

Planning should take into account her care, housing, comfort, safety and quality of life—not simply the goal of preserving the largest possible inheritance for the next generation.

Sometimes the Best Medi-Cal Plan Isn’t a Medi-Cal Plan

This is an important point that can get lost in discussions about eligibility.

Not everyone who might eventually qualify for Medi-Cal should immediately rearrange his or her entire financial life to do so.

Suppose a parent strongly prefers a particular living arrangement that Medi-Cal will not pay for. Or the family intends to keep Mom at home with private caregivers. Or she has sufficient assets and income to provide the care she wants without jeopardizing her financial security.

Those circumstances matter.

The goal should be to develop a care and financial plan that works for the individual—not simply to qualify for a government benefit.

So, Is It Too Late?

Usually, the fact that a parent is already paying for care does not, by itself, tell us whether planning is too late.

But waiting can reduce the available options.

When I evaluate a Medi-Cal planning matter, some of the first questions I want answered are:

• What level of care does the person currently need?
• Where is that care being provided?
• What income does the person receive?
• What assets does the person own?
• Is there a spouse or registered domestic partner?
• Is there a residence, and how is title held?
• What estate planning documents already exist?
• Who has authority to act if the person loses capacity?
• What does the individual actually want for his or her care?

Only after answering those questions does it make sense to talk about transfers, trusts, spend-down strategies or other planning.

California’s Medi-Cal rules have changed repeatedly in recent years. The elimination of the asset test in 2024 and its return in 2026 are good examples of why families should be cautious about relying on something they read online several years ago—or advice that worked for another family.

If you or a family member is facing the cost of long-term care, The Law Office of Maureen Lyons, PC can help evaluate how Medi-Cal, existing estate planning documents, assets and long-term care goals fit together.