Is Your Family Home at Risk from Medi-Cal Estate Recovery?

Medi-Cal estate recovery is the process by which the California Department of Health Care Services (DHCS) seeks reimbursement from the estates of deceased Medi-Cal beneficiaries for benefits paid on their behalf. Under California Welfare & Institutions Code § 14009.5, DHCS may file a claim against the decedent's estate — including the family home — after death. Estate recovery applies to benefits received on or after age 55, and to recipients of any age who were permanently institutionalized. California has one of the broadest estate recovery programs in the nation.

Yes — under California Welfare & Institutions Code § 14009.5, DHCS can file an estate recovery claim against a deceased Medi-Cal beneficiary's estate, which can include the family home. The home is generally exempt from Medi-Cal while the beneficiary is alive if there is an intent to return or a spouse/dependent still living there. However, after death, DHCS may pursue recovery for the full value of benefits paid. Certain hardship exemptions exist but are narrowly applied. Proper planning — ideally through a Medi-Cal Asset Protection Trust (MAPT) established before the 30-month look-back period — can protect the home.

No — a revocable living trust does NOT protect assets from Medi-Cal. This is the most common misconception in Medi-Cal planning. Assets held in a revocable trust remain fully countable for Medi-Cal eligibility purposes because the grantor retains control and the ability to revoke the trust. For assets to be protected from Medi-Cal, they must be transferred to an irrevocable trust — specifically a Medi-Cal Asset Protection Trust (MAPT) — at least 30 months before applying for Medi-Cal benefits (California's look-back period). Do not rely on a revocable trust for Medi-Cal asset protection.

A Medi-Cal Asset Protection Trust (MAPT) is an irrevocable trust specifically designed to shelter assets from Medi-Cal countability and estate recovery. When properly structured and funded, assets transferred to a MAPT are no longer considered "countable" for Medi-Cal eligibility — allowing the grantor to qualify for Medi-Cal nursing home or in-home care benefits without spending down those assets. Because California has a 30-month look-back period, the MAPT must be established and funded at least 30 months before the Medi-Cal application is filed. A MAPT must be drafted by a California attorney with expertise in Medi-Cal planning; a generic irrevocable trust may not achieve the desired result.

California's Medi-Cal asset limits changed significantly on January 1, 2026, when the state reinstated asset-based eligibility rules. Through June 30, 2027, the asset limit is $130,000 per individual (+ $65,000 per additional family member, up to 10 people). Starting July 1, 2027: $21,000 per person · $31,000 for two people · +$1,550 per additional person. Important: adult children living in the home are NOT counted toward family size — a senior living with an adult child still qualifies only for the single-person limit. and $195,000 per couple. IRAs and pension accounts that are receiving regular periodic payments are exempt. The primary home is always exempt during the beneficiary's lifetime (if they intend to return or a spouse lives there). Effective July 1, 2027, the limit drops sharply to limits that may change annually — verify at dhcs.ca.gov — dramatically reducing the threshold for disqualification. The family home is generally exempt during the beneficiary's lifetime but subject to estate recovery after death. Countable assets include bank accounts, investments, second properties, and — importantly — revocable trusts. Exempt assets include the primary residence (with conditions), one vehicle, personal property, and certain other items.

California has a 30-month (2.5-year) look-back period for asset transfers. When someone applies for Medi-Cal benefits that cover long-term care (nursing home or HCBS waiver), DHCS reviews all asset transfers made in the 30 months preceding the application date. Transfers made for less than fair market value during this window can result in a penalty period — a period during which Medi-Cal will not cover long-term care costs, even if the applicant is otherwise eligible. The penalty period is calculated by dividing the value of the transferred assets by the average monthly private-pay rate for nursing home care in California. Proper planning requires starting before the look-back period begins.

The family home is generally exempt (not counted) for Medi-Cal eligibility purposes while the applicant is alive, provided they intend to return to the home or a spouse or dependent relative lives there. This means owning a home does not automatically disqualify someone from Medi-Cal. However, the home becomes subject to DHCS estate recovery after the beneficiary's death under California Welfare & Institutions Code § 14009.5. To protect the home from estate recovery — while still qualifying for Medi-Cal — the most effective strategy is a properly structured Medi-Cal Asset Protection Trust (MAPT) established and funded at least 30 months before the Medi-Cal application. Other strategies may apply depending on your situation.

California law requires that the estate representative or responsible party notify the California Department of Health Care Services (DHCS) within 90 days of the death of a Medi-Cal beneficiary. This notification triggers DHCS's estate recovery process, during which the department will calculate the total amount paid on behalf of the decedent and file a claim against the estate. Failing to provide timely notice does not eliminate the estate recovery claim — DHCS can still pursue recovery after the fact. Executors, trustees, and family members should consult with a California estate planning attorney promptly after a Medi-Cal beneficiary's death to understand their obligations and any available defenses or hardship exemptions.