Important Update for Long-Term Care Planning in California

As of January 1, 2026, California is reinstating Medi-Cal asset limits for long-term care eligibility. After a temporary suspension, the return of these limits means that a client’s asset position can now disqualify them from receiving Medi-Cal support for nursing home and long-term care costs unless proper planning is in place.

This change has significant implications for retirement and estate planning strategies:

Asset Restructuring Matters More Than Ever Clients who previously relied on the suspension may now find their eligibility impacted unless assets are positioned appropriately.

Timing Is Critical For many clients approaching eligibility, delaying action could result in disqualification or unintended financial exposure. Decisions made early in 2026 are going to matter.

Coordination Across Disciplines Is Key This isn’t just a legal issue — it’s a tax, financial, and cash-flow planning issue. CPAs and financial planners are now on the front lines of helping clients revisit long-term care strategies alongside estate planning counsel.

Considerations may include:

• Irrevocable trusts and other spend-down strategies

• Gifting and strategic transfers

• Reviewing retirement and non-countable asset classifications

• Integration with existing estate and incapacity planning

What’s the practical next step?Now is a great time to review your clients’ current long-term care plans and discuss how the reinstated Medi-Cal asset limits could affect eligibility and overall wealth transfer goals.

When tax, Medi-Cal eligibility, and legacy planning intersect, a coordinated planning process makes all the difference.

Let’s ensure our clients are not caught off guard by policy change — but instead, are positioned proactively for 2026 and beyond.

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