Does Medi-Cal Take Your Home After You Die?
Sometimes. Yes.
California's estate recovery program allows the state to seek reimbursement after your death for benefits it paid during your lifetime. Your home is usually the largest asset they target.
What surprises most families isn't the rule. It's when they learn about it. Usually after it's too late to plan.
Can Medi-Cal Take Your House While You're Alive?
Generally, no. Your primary home is exempt while you're alive, even if you're on Medi-Cal.
But there's an exception. If you're unmarried, no dependent lives with you, and you're in a nursing home long-term? The equity in your home can become countable toward the asset limit.
That's when things get complicated. A living trust can help, but not in the way most people think.
Will Medi-Cal Take My Savings?
Maybe. It depends on how much you have and what kind of care you need.
As of January 2026, California reinstated asset limits for nursing home Medi-Cal:
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$130,000 for an individual
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$195,000 for a couple
If your countable assets exceed these limits, you won't qualify for nursing home coverage until you spend down. But not everything counts. Your house (usually), one car, and personal belongings are exempt.
Will Medi-Cal Take My Savings?
Maybe. It depends on how much you have and what kind of care you need.
As of January 2026, California reinstated asset limits for nursing home Medi-Cal:
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$130,000 for an individual
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$195,000 for a couple
If your countable assets exceed these limits, you won't qualify for nursing home coverage until you spend down. But not everything counts. Your house (usually), one car, and personal belongings are exempt.
The 2026 Medi-Cal Asset Limit Is Back
From 2024 to 2025, California suspended the asset limit for most Medi-Cal programs. That changed on January 1, 2026.
The asset limit is now 130,000foranindividualand130,000foranindividualand195,000 for a couple. If you own more than that in countable assets, you may not qualify for nursing home Medi-Cal.
This catches people off guard. They thought the asset limit was gone forever. It wasn't. It was just on vacation.
What Counts Toward the $130,000 Limit?
Not everything you own counts. But these usually do:
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bank accounts (checking, savings, CDs)
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stocks, bonds, and mutual funds
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a second car
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a second home or rental property
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cash
If your countable assets exceed the limit, you won't qualify for nursing home coverage until you spend down or restructure.
What Doesn't Count (Exempt Assets)?
Here's what generally doesn't count toward the asset limit:
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your primary home (equity doesn't count while you're alive)
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one vehicle
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household furniture and personal belongings
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retirement accounts (401k, IRA) — but RMDs count as income
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prepaid burial plans
Exempt assets are safe. But timing matters. Transferring assets improperly before applying for Medi-Cal can trigger penalty periods.
Who Does This Affect?
The 2026 asset limit applies to:
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individuals 65 and older
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persons with disabilities (regardless of age)
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those needing long-term nursing home care
Current Medi-Cal recipients are not grandfathered. At your annual renewal, the county will review your assets. If you exceed the limit, you could lose coverage.
This is where most people get blindsided.
Can a Living Trust Protect Your Home from Medi-Cal?
The short answer is: maybe, but not in the way most people think.
A living trust does not automatically shield your home from Medi-Cal while you're alive. But it can help protect it from estate recovery after death by avoiding probate. That's where the real risk lies for most California homeowners.
What a trust definitely does: avoids probate. Keeps your affairs private. What it does NOT do: magically hide your home from Medi-Cal while you're breathing.
Eligibility vs. Recovery (The Distinction Most People Miss)
These two concepts get mixed up all the time. Here's the difference.
Eligibility (during your lifetime): As of January 2024, California eliminated the asset test for most Medi-Cal programs. Your home is generally not counting against you — whether it's in a trust or not.
But as of January 2026, asset limits are back for nursing home Medi-Cal. Your primary home is still exempt while you're alive, but the equity can become countable depending on your marital status.
Recovery (after death): This is where the living trust actually helps. For deaths on or after January 1, 2017, California's estate recovery is limited to assets that pass through probate. A properly funded living trust avoids probate. No probate = no state claim on your home.
What a Living Trust Does NOT Do
Let's be clear about the limits.
A living trust does NOT:
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protect your assets from the 2026 asset limit during your lifetime
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shield you from the look-back period if you transfer assets before applying for nursing home care
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fix income problems (Medi-Cal has income limits too)
This is where most people assume a trust solves everything. It doesn't. But it's one piece of a Medi-Cal plan.
The Catch (There's Always a Catch)
A living trust isn't a magic shield. It solves probate. It helps with estate recovery. But timing matters.
If you transfer your home into a trust and then apply for nursing home Medi-Cal within roughly three years, you could face a penalty period. The state may treat the transfer as a disqualifying asset move.
That doesn't mean you shouldn't do it. It means you should do it before you need care. Not when you're already in the hospital.
Married? The Rules Are Different for You
If you're married and one spouse needs nursing home care, the asset rules change. California has spousal impoverishment protections that allow the "community spouse" (the one still at home) to keep more assets.
The 2026 limits allow the community spouse to retain up to approximately 130,000–130,000–150,000 in countable assets, plus their own income. The home is also protected while the community spouse lives there.
But here's where it gets tricky. Improper planning can leave the community spouse with too little or accidentally disqualify the institutionalized spouse. The rules are specific. And unforgiving.
This section is coming soon. In the meantime, call me if you're married and worried about Medi-Cal.
Special Needs Planning and Medi-Cal
If you have a child or dependent with special needs, Medi-Cal is likely already part of their life. But leaving them an inheritance directly could disqualify them from benefits.
ABLE accounts (tax-advantaged savings for disabled individuals) were expanded in 2026 to allow contributions up to age 46. A third-party special needs trust can also receive inheritance without affecting benefit eligibility.
These are powerful tools. But they require careful drafting. One mistake and your child loses coverage.
This section is coming soon. In the meantime, call me if you're planning for a loved one with special needs.
Blended Families and Second Marriages
Medi-Cal planning gets more complicated when you have stepchildren, ex-spouses, or separate property from a previous marriage. The state's recovery rules don't care about your family dynamics.
Without proper planning, your home could go to the state instead of your children from a first marriage. Or your current spouse could be left with nothing.
This section is coming soon. In the meantime, call me — especially if you've been married more than once.
What If I Already Have a Trust?
If you already have a living trust, good. You're ahead of most people.
But not all trusts are created equal. Many trusts say nothing about Medi-Cal. They avoid probate. They name guardians for kids. But they don't address asset limits, look-back periods, or estate recovery.
Your existing trust may be enough. Or it might leave your family exposed. There's only one way to know.
This section is coming soon. In the meantime, bring me your trust. I'll tell you what it does and doesn't do.
How Medi-Cal Planning Connects to Estate Planning
Most people think Medi-Cal planning and estate planning are separate. They're not.
A complete estate plan coordinates both. It protects your home from probate. It addresses asset limits. It considers the look-back period. And it ensures your kids don't get blindsided by an estate recovery claim after you're gone.
You don't need two plans. You need one plan that does both.
The Bottom Line
Here's what you actually need to know.
A living trust can protect your home from Medi-Cal estate recovery after death by keeping it out of probate. No probate = no state claim on your home.
But a living trust does NOT automatically protect you from eligibility issues for nursing home care. The 2026 asset limits (130,000individual/130,000individual/195,000 couple) still apply. Your home is exempt while you're alive, but timing matters.
If you're worried about Medi-Cal taking your house, don't google your way into a panic. Call someone who does this every day.
Related Estate Planning Topics
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Living Trusts → how they work, why they avoid probate
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Probate → why you want to avoid it, what it costs
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Estate Planning Costs → what to expect, flat fee options