For most West Valley families, the home is the largest asset they own — and in many cases, the one they most want to protect. Long-term care costs in Los Angeles County can run $10,000 to $14,000 per month. Without planning, those costs can consume a lifetime of accumulated equity. With the right structure in place, they don’t have to.
Many families come in with a single concern — they want to protect the house. But protecting the house means something different depending on which threat you’re planning against. Getting this distinction right determines which strategy actually works.
California’s Medi-Cal program can seek reimbursement from a deceased recipient’s estate for long-term care costs paid on their behalf. However, estate recovery can only reach assets that pass through probate — it cannot reach assets held in a living trust.
This means that for most families, a properly drafted and funded revocable living trust is sufficient to protect the home from Medi-Cal estate recovery. The home does not need to be transferred out of the family’s ownership to be protected from this specific risk.
The home is also an exempt asset for Medi-Cal eligibility purposes. A person applying for Medi-Cal is not required to sell or transfer their home to qualify. Transferring the home does not help with Medi-Cal eligibility — and it can create other problems, particularly under Proposition 19.The home is also an exempt asset for Medi-Cal eligibility purposes. A person applying for Medi-Cal is not required to sell or transfer their home to qualify. Transferring the home does not help with Medi-Cal eligibility — and it can create other problems, particularly under Proposition 19.
The more immediate concern for most families is not the home itself — it’s the accounts, savings, and investments that Medi-Cal requires to be spent down before eligibility is established. Skilled nursing care in Los Angeles County runs $10,000 to $14,000 per month. A two-year stay can consume $250,000 or more of a family’s savings.
Protecting against this requires Medi-Cal planning — specifically, restructuring how assets are held so that a qualifying plan is in place before the spend-down clock starts running.
Monthly SNF cost in LA County
Medi-Cal lookback period
Trust assets protected from estate recovery
Here is the planning mistake that causes families the most damage: transferring the family home to children in an attempt to protect it from long-term care costs.
In California, a home transferred to children is subject to full property tax reassessment under Proposition 19 — unless the child moves in and establishes it as their primary residence. For a West Valley home purchased in 1980 for $90,000 that is now worth $1.3 million, reassessment means the annual property tax burden increases permanently and dramatically. That’s a real cost that outlasts any Medi-Cal benefit.
And critically: transferring the home does not actually help with Medi-Cal eligibility, because the home is already an exempt asset. Families who transfer the home are creating a Prop 19 problem in exchange for a Medi-Cal benefit they were already entitled to keep.
A home transfer to children does not reduce Medi-Cal exposure. The home is exempt for Medi-Cal purposes whether it’s in the parent’s name or not. What it does do is trigger Proposition 19 reassessment — permanently increasing the children’s property tax burden. This is one of the most common planning mistakes we see.
estate recovery and asset spend-down — without creating the Prop 19 problem that a home transfer would cause.
Keeps the home out of probate entirely, which means Medi-Cal estate recovery cannot reach it. No transfer is needed. The home stays in the family’s control during the grantor’s lifetime.
Restructures how non-home assets are held so that savings and investments are protected during the Medi-Cal spend-down period. The strategies available depend on timing — proactive planning before any care need arises offers the most options.
For families that want to go further and protect assets beyond the home, an irrevocable trust can move certain assets out of the grantor’s personal ownership. This requires careful timing relative to California’s 30-month Medi-Cal lookback period.
Any plan that involves real estate must account for how transfers affect property tax reassessment. The right structure depends on whether children will keep the property, how much it has appreciated, and how the rest of the estate plan is structured.
Founder, The Estate Planning & Elder Law Firm
The 30-month lookback period for Medi-Cal applies to certain asset transfers. This means that strategic restructuring must be completed at least 30 months before a Medi-Cal application is filed to avoid creating a penalty period. Planning done after a crisis is still possible but the options narrow significantly.
Families within five to ten years of retirement, or anyone with a parent who is aging and has not had a Medi-Cal planning conversation, should review their situation now. The planning window that exists today may not exist tomorrow.
For most families, no. The home is an exempt asset for Medi-Cal eligibility purposes — you are not required to sell it or transfer it to qualify for benefits. What a transfer to children does do is trigger Proposition 19 reassessment, which permanently increases your children’s property tax burden. Transferring the home creates a real cost in exchange for a Medi-Cal protection you already had.
Medi-Cal estate recovery can only reach assets that pass through probate. Assets held in a properly funded revocable living trust do not go through probate and are not subject to estate recovery. A trust is the primary protection against this risk.
California’s Medi-Cal program reviews asset transfers made within 30 months before a Medi-Cal application for long-term care. Transfers made during that window can create a penalty period during which Medi-Cal will not pay for care. This is why planning must happen before any care need arises, not after.
A Medi-Cal Asset Protection Trust is an irrevocable trust that can protect certain assets from Medi-Cal spend-down. Because the home is already exempt for Medi-Cal eligibility purposes, a MAPT is typically more useful for protecting non-home assets such as savings and investments. However, the right strategy depends on the full picture of the family’s assets and goals.
It depends on the situation. Crisis Medi-Cal planning is still possible in many cases, and there are strategies available even after care has begun. However, the options are more limited than with proactive planning. A consultation will clarify what is still possible given the specific circumstances.
A first conversation is straightforward. We review how your assets are held, what the Medi-Cal and Prop 19 rules mean for your specific situation, and what planning strategies are still available to you. No obligation — just clarity at a time when getting this right matter.
