Most living trusts and powers of attorney are written to avoid probate and pay the bills. Very few are written for the moment a parent or spouse needs long-term care. With Medi-Cal’s asset limit back in force, that gap can cost a family its savings or even the home.
What changed on January 1, 2026
- The asset limit is back: $130,000 for one person, plus $65,000 for each additional household member ($195,000 for a couple).
- The 30-month look-back is back for long-term care Medi-Cal. Gifts and transfers for less than fair value can trigger months of ineligibility for nursing home coverage.
- Estate recovery still applies to what passes through probate after a Medi-Cal recipient dies.
Why the wording of your documents matters
Medi-Cal planning usually has to happen after someone can no longer manage their own affairs, often during a health crisis. At that point the plan can only do what the documents allow. If the power to plan isn’t written into the trust or power of attorney, the family may be stuck. They may need a court conservatorship, which takes months and costs thousands of dollars, while care bills keep coming.
Your Financial Durable Power of Attorney
Under California law, your agent can’t make gifts, create or change trusts, or change beneficiaries unless the document expressly says so. A basic “statutory” form usually doesn’t. An enhanced power of attorney can authorize your agent to:
- Apply for Medi-Cal and handle appeals and renewals for you
- Transfer assets to a spouse and use spousal protections
- Convert countable assets into exempt assets, such as paying off the home or replacing a vehicle
- Make planned gifts and fund a Medi-Cal asset protection trust
- Purchase a Medi-Cal compliant annuity or set up a special needs trust when appropriate
Your Revocable Living Trust
A properly funded living trust keeps assets out of probate, and it generally keeps them out of Medi-Cal estate recovery too. But a standard trust often doesn’t let your successor trustee do Medi-Cal planning while you are alive and unable to act. Medi-Cal language can:
- Give the trustee authority to make transfers to a spouse or family when you are incapacitated
- Protect your home, including keeping it out of probate and estate recovery
- Hold a disabled or Medi-Cal-eligible beneficiary’s share in a supplemental needs trust so they keep their benefits
- Coordinate with your power of attorney so your agent and trustee can work together
Should you have your documents reviewed?
A review makes sense if any of these apply to you or a parent:
- Your trust or power of attorney was signed more than five years ago
- You used a fill-in-the-blank or online form
- You are married and worried about protecting the healthy spouse
- There is a diagnosis of memory loss, Parkinson’s, or another progressive condition
- You have a child or grandchild with a disability who may rely on public benefits
Adding this language is usually simple when you are healthy. It can be very hard, or impossible, once capacity is lost.
Schedule a review
Call (925) 256-0298 to schedule a review of your trust and power of attorney. I represent clients throughout California by phone and Zoom.
Helping a parent? Start with my family guide.
A California Family Guide to Estate Planning: Asset Protection, Medi-Cal, Dementia and Aging Parents (2026 Edition) walks you through the documents, conversations and Medi-Cal basics in plain English, with 7 printable worksheets. Use code FAMILY5 for $5 off: https://lawyoung3.gumroad.com/l/california-family-guide/FAMILY5
This article is for general information only and is not legal advice. Reading it does not create an attorney-client relationship. Medi-Cal rules change, and every family’s situation is different, so please consult an attorney about your own circumstances.
