California’s Medi-Cal Clawback: What Probate Attorneys Need to Know in 2026

Starting January 1, 2026, California reinstated the Medi-Cal asset test for non-MAGI programs—and with it, transfer-penalty look-back rules. For probate and estate planning attorneys, this changes the conversation around long-term care planning significantly.

The New (Old) Rules

For the past several years, California eliminated asset limits for Medi-Cal eligibility, making it easier for individuals to qualify for long-term care benefits while retaining assets. That experiment is over.

The reinstated thresholds are:

  • $130,000 for an individual
  • $195,000 for a married couple

More importantly, transfer-penalty rules are back. This means the state will scrutinize asset transfers made within the look-back period before a Medi-Cal application, potentially imposing penalty periods that delay eligibility.

Why This Matters for Probate

Medi-Cal estate recovery remains alive and well in California. When a Medi-Cal recipient dies, the state can seek reimbursement from their estate for benefits paid during their lifetime. This directly impacts probate administration and the assets available for distribution to heirs.

With asset limits back in place, expect to see:

  • Increased interest in Medi-Cal planning strategies
  • More scrutiny of pre-death asset transfers
  • Greater complexity in probate cases involving Medi-Cal recipients
  • Rising estate recovery claims

Planning Considerations

Clients who may need long-term care should be counseled on these changes well before a health crisis occurs. The look-back period makes last-minute planning ineffective or counterproductive.

Irrevocable trusts, spousal protections, and careful asset positioning may again become essential tools—but they require advance planning to be effective.

The Takeaway

California’s return to asset-tested Medi-Cal means estate planning for long-term care is once again a critical conversation. Attorneys who can guide clients through these rules will provide substantial value in the years ahead.

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