California Medi-Cal Look-Back and Asset Transfer Rules

California resumed review of certain transfers after asset limits returned on January 1, 2026. The review period is being phased in toward 30 months.

Updated August 25, 2026 using DHCS All County Welfare Directors Letter 25-18.

Do not give away assets based on a simple 30-month rule

A gift, bargain sale, deed change, or transfer to a trust can affect eligibility, taxes, control, creditors, and the family’s ability to pay for care. The application date, care setting, transfer date, value received, exemptions, and current phase-in schedule all matter.

What is the Medi-Cal look-back period?

For long-term-care Medi-Cal, the county may review transfers made before the application or entry into long-term care. A transfer for less than fair market value can produce a period during which Medi-Cal will not pay for nursing-facility-level services, even when the applicant otherwise qualifies.

How California’s phase-in works

DHCS guidance says months during the 2024 and 2025 asset-test elimination are not reviewed. Beginning July 1, 2026, the number of post-January 2026 months reviewed increases by one month each month. The full 30-month review applies to long-term-care applications and members entering long-term care on or after July 1, 2028.

What can count as a transfer?

A transfer can include a gift or sale for less than fair market value. It may involve cash, real estate, an ownership interest, or another resource. Retitling a home or account can be a transfer even when no cash changes hands.

Not every transfer is treated the same

Federal and California rules recognize exceptions and protections, including some transfers involving a spouse, a blind or disabled child, and specified home-transfer circumstances. Fair-market-value transactions and transfers made exclusively for another permitted purpose may receive different treatment. The facts and documentation control.

Why the penalty can create a care crisis

A family may discover that an applicant meets the current asset limit but still has a transfer penalty. During the penalty period, the nursing facility still expects payment. If the transferred asset is no longer available, the family can be left without the resource needed to cover care.

Records to preserve

Bank and investment statements
Recorded deeds and escrow files
Appraisals and evidence of fair market value
Trust documents and amendments
Care agreements and proof of services
Documents supporting a statutory exception
Written legal and tax advice received before the transfer

Official guidance and next steps

Read DHCS All County Welfare Directors Letter 25-18. Then review the 2027 Medi-Cal asset limits, California estate recovery rules, and the main Medi-Cal planning attorney guide.

Get advice before making the transfer

Early review can prevent an avoidable eligibility penalty and preserve more lawful planning options.

Schedule a consultation