If you or a loved one may need nursing home care or assisted living in California, understanding the new Medi-Cal asset transfer rules is critical to protecting your family’s financial security. The California Department of Health Care Services (DHCS) recently issued crucial guidance that changes how asset transfers are evaluated when applying for Medi-Cal coverage for long-term care.
Who This Impacts
This guidance is essential for:
- Seniors planning for potential nursing home or assisted living care
- Adult children helping parents navigate long-term care costs
- Anyone who transferred assets between 2023-2025 and may need Medi-Cal coverage
- Families concerned about preserving inheritance while qualifying for benefits
What Changed: The Return of Asset Limits
On January 1, 2026, Medi-Cal reinstated asset limits for long-term care eligibility after a two-year pause. According to All-County Welfare Directors Letter 25-18(published October 9, 2025), DHCS will now review asset transfers using a 30-month lookback period from your application date.
The Key Rule You Need to Know
Here’s what makes this guidance unique: transfers made between January 1, 2024 and December 31, 2025 are NOT disqualifying, even though they fall within the lookback period. This creates a significant planning opportunity that many families don’t realize exists.
How Asset Transfer Penalties Work Now
The rules vary depending on when you apply for Medi-Cal:
Applications from January 2025 through January 2026
- DHCS reviews transfers made before January 1, 2024
- The review period decreases each month
- Example: A January 2026 application only looks back 6 months (July-December 2023)
Applications from February 2026 through June 2026
- DHCS reviews two periods: pre-2024 transfers AND post-2025 transfers
- Example: A May 2026 application reviews November-December 2023 and January-April 2026
Applications from July 2026 onward
- The review period for post-2025 transfers gradually increases
- Example: A July 2026 application reviews January-June 2026 (6 months)
- Example: A January 2027 application reviews all of 2026 (12 months)
Real-World Planning Questions This Answers
“My mother gave money to her grandchildren in 2024. Will this affect her Medi-Cal eligibility?”
No. Gifts made during 2024-2025 are protected under this guidance.
“I’m helping my father apply for Medi-Cal in March 2026. What transfers will be reviewed?”
DHCS will review transfers from September-December 2023 and January-February 2026.
“Can I still do estate planning if I might need nursing home care soon?”
Yes, but timing matters. The 30-month lookback periodmeans strategic planning should happen well before you anticipate needing care.
Why This Matters for Your Family’s Legacy
Without proper planning, long-term care costs can quickly deplete life savings meant for your spouse or children. California nursing homes average $8,000-$12,000 per month, and most families exhaust their resources within two years. Understanding these transfer rules helps you:
- Protect assets for your spouse’s financial security
- Preserve inheritance for children and grandchildren
- Avoid penalties that delay Medi-Cal coverage when you need it most
- Make informed decisions about gifting and estate transfers
The Reference Chart You Need
DHCS included a detailed reference chart in All County Welfare Director’s Letter 25-18that shows exactly which months will be reviewed based on your application date. This chart is an essential tool for anyone planning long-term care strategies.
Expert Guidance Makes the Difference
The intersection of Medi-Cal eligibility, asset protection, and estate planning requires specialized knowledge. At California Probate and Trust, our certified estate planning specialists have helped thousands of California families navigate these complex rules while protecting what they’ve spent a lifetime building.
We understand that planning for long-term care means confronting difficult realities about aging and health. Our compassionate approach provides clarity during uncertain times, helping you make informed decisions that protect both your care needs and your family’s financial future.
Take Action Now
The new Medi-Cal asset transfer rules create both opportunities and risks. Whether you’re planning ahead or facing an immediate need for long-term care, professional guidance can mean the difference between preserving your legacy and losing it to care costs.
California Probate and Trust offers a free one-hour consultation to review your situation and develop a personalized strategy. Our team will help you understand:
- How the lookback period applies to your specific timeline
- Which assets are protected and which are vulnerable
- Strategies to preserve your estate while ensuring care coverage
- How to coordinate Medi-Cal planning with your overall estate plan
Schedule Your Free Consultation
Don’t let confusion about Medi-Cal rules put your family’s financial security at risk. Contact California Probate and Trust today at (866) 674-1130 or visit cpt.law/contact-us to schedule your free consultation with an experienced estate planning attorney.
Source: California Department of Health Care Services, All-County Welfare Directors Letter 25-18, October 9, 2025