She called on a Tuesday afternoon. Her father had been diagnosed with dementia six weeks earlier, his decline had been faster than the family expected, and she was beginning to look at what came next. He still lived in the home he had owned for forty years in Lafayette. He had savings. He had a small pension. He had two daughters who loved him. And she was calling because someone in her circle had mentioned that California’s Medi-Cal rules had just changed.
This is the call I receive often. Sometimes the diagnosis is dementia. Sometimes it is a stroke, a fall, or a progressive condition that has reached the point where the family realizes long-term care may be ahead. The names and details change. The conversation does not. What I find myself saying, again and again, is some version of: I am glad you called. I wish you had called two years ago.
For families in Walnut Creek, Lafayette, Orinda, Danville, Concord, Pleasant Hill, Moraga, and San Ramon — and across the East Bay — there is a piece of news from January 1, 2026 that matters more than the federal estate tax headlines. The strict Medi-Cal asset limits that families thought were a thing of the past have been reinstated. The window for advance planning is narrower than it used to be. And most families do not realize how quickly the costs of long-term care can change everything they have built.
This is the piece I wish every family in the East Bay would read before they need it.
What Actually Changed on January 1, 2026
For most of the past three years, California operated under a relatively generous Medi-Cal eligibility framework. The asset limit had been raised substantially, and the lookback period — the window during which the state can scrutinize an applicant’s prior asset transfers — had been removed.
That ended on January 1, 2026.
Under the reinstated rules, a single person can have no more than $130,000 in countable assets to qualify for long-term care Medi-Cal coverage. A married couple where one spouse needs care is limited to a Community Spouse Resource Allowance of $162,660 — the amount the well spouse, the one who is not in care, is permitted to keep.
The 30-month lookback period has also been reinstated. This means that asset transfers — gifts to children, transfers of property, large withdrawals — made in the 30 months before applying for Medi-Cal can now be reviewed by the state. Transfers that look like an effort to qualify by giving assets away may result in a penalty period during which the applicant is ineligible for benefits.
For families who were considering long-term care planning under the more relaxed framework of 2023, 2024, or 2025, the landscape has changed substantially. The strategies that worked then are not necessarily the strategies that work now.
What Long-Term Care Actually Costs in the Bay Area
The reason these rules matter is the reason families plan for them at all. Long-term care in the Bay Area is among the most expensive in the country.
A skilled nursing facility in Contra Costa County typically runs between $13,000 and $18,000 per month. That is $156,000 to $216,000 per year. For a couple where one spouse enters care, the cost can drain a lifetime of careful saving in three to five years. For a single person without family support, it can be faster.
These are not numbers I cite for effect. These are the numbers I see on monthly statements when adult children come to my office and lay them out on the conference room table. By the time a family is paying $15,000 a month out of pocket, they are usually past the point where they could have planned around it.
This is the calculus most families never quite confront in advance. We assume Medicare will cover long-term care — it does not, except for the first 100 days of skilled nursing after a hospital stay, and even those days have significant copays after the first 20. We assume the home will absorb the costs through sale or reverse mortgage. We assume the children will help. We assume that we will figure it out when the time comes.
Most families do figure it out when the time comes. They figure it out by spending down their assets to qualify for Medi-Cal — often after losing decades of savings that could have been preserved with earlier planning.
The 30-Month Lookback, Explained Simply
The reinstatement of the 30-month lookback is the change that catches most families off guard.
Here is what the lookback actually does. When someone applies for long-term care Medi-Cal, the state reviews their financial records for the previous 30 months. The state is looking for asset transfers — gifts, transfers of real property, and large withdrawals that were not for the applicant’s benefit. If the state finds such transfers, it can impose a penalty period during which the applicant is ineligible for benefits, calculated based on the value of the transferred assets and the average cost of long-term care.
The instinct most families have when they realize Medi-Cal is on the horizon is to give the house to the children, transfer the savings into the grandchildren’s accounts, or simply spend down the money on things the family was going to buy anyway. Under the reinstated rules, those moves often do not solve the problem. They may make it worse. A gift made 18 months before applying for Medi-Cal is not a gift the state will overlook.
This is where the timing matters. Planning for Medi-Cal eligibility is not something that works in the 30 days, six months, or even a year before care is needed. It is something that works when there is genuine time and distance between the planning and the application.
The families who plan well in this area are not the families racing against the clock. They are the families who started thinking about this five, eight, or ten years before anyone actually needed care.
What Advance Planning Looks Like
I am going to describe this at a concept level, because the right strategy depends entirely on a family’s specific circumstances, and the planning needs to be designed by an attorney who understands both California Medi-Cal rules and the family’s broader estate plan. There are no one-size-fits-all answers in this area, and the wrong move can be more damaging than no move at all.
But at a concept level, comprehensive Medi-Cal planning for a Bay Area family generally addresses several things at once.
It looks at the home — what it is worth, how it is currently titled, who lives there, and what happens if one spouse needs care while the other continues to live in the home. The home is generally exempt for Medi-Cal eligibility while the well spouse, a child under 21, or a dependent relative continues to live there, but estate recovery after death is a separate consideration that requires its own planning.
It looks at retirement accounts. IRAs and 401(k) accounts are treated differently from other assets — generally considered unavailable for the beneficiary if required minimum distributions are being taken, and entirely exempt if held in the well spouse’s name. Most families do not realize how much flexibility this can create.
It looks at the timing of transfers. The 30-month lookback means that any transfer of significant assets needs to happen well before care is needed. There are strategies that work, and there are strategies that look like they work and create problems later. The difference matters.
It looks at the broader estate plan. Medi-Cal planning is not separate from estate planning — it is part of it. The trust structure, the powers of attorney, the property titling, the beneficiary designations — all of it needs to work together. A standalone Medi-Cal strategy that conflicts with the rest of the estate plan often causes more problems than it solves.
And it looks at the family. Who will be making decisions if the applicant cannot make them. Who will manage the home. Who will coordinate care. Who will communicate with the state. These are not legal questions, but they are planning questions, and they belong in the conversation.
The Biggest Mistake Families Make
The biggest mistake families make in this area is waiting until someone needs care.
I understand why it happens. Long-term care is not something most families want to think about. The conversations are difficult. The decisions feel hypothetical until they are not. And families have a tendency to assume that whatever happens, they will deal with it when the time comes.
But the rules I have just described — the asset limits, the lookback period, the timing requirements — do not accommodate “when the time comes.” They reward families who started the conversation five years before they needed to and penalize families who started six months too late.
The family I described at the beginning of this piece — the daughter calling on a Tuesday afternoon, her father with a recent dementia diagnosis — had options. They had less time than they would have had two years earlier, and the strategies available to them were narrower than they would have been. But they had options. The family I think about more often is the one I have not heard from yet — the one whose parent will be diagnosed next month, whose plan will need to be made in 60 days, and whose options will be far more constrained.
If there is a parent in your life who is in their 70s or 80s and still healthy, this is the moment when planning is most valuable. Not the moment of diagnosis. Not the moment of decline. The moment when there is still time and distance.
How Medi-Cal Planning Fits Into the Rest of Your Estate Plan
One of the things I see most often when families come to Absolute Trust Counsel is the assumption that Medi-Cal planning is something separate — a single transaction, a single document, a single decision. It is not.
For a Bay Area family with a home, retirement savings, and potential long-term care needs ahead, Medi-Cal planning is woven through the entire estate plan. The trust needs to be structured with the right kind of provisions. The durable power of attorney needs to give the right agent the authority to make Medi-Cal-related decisions and asset transfers if the applicant cannot. The property titling needs to reflect not just inheritance goals but also Medi-Cal asset rules and estate recovery considerations. The beneficiary designations on retirement accounts need to be designed with both estate and Medi-Cal considerations in mind.
When these pieces work together, a family is positioned to access long-term care benefits when they are needed without unnecessarily giving up the assets they have spent decades building. When these pieces do not work together — when the estate plan was designed in isolation from Medi-Cal considerations, or vice versa — families often find that the plan that looked good on paper does not work in practice.
The plan is not the documents. The plan is the way the documents work together, the way the assets are titled, the way the family understands what is in place, and the way it adapts as the family’s circumstances change. That is the work.
How We Work at Absolute Trust Counsel
Our process starts with one meeting. Families come in and meet with us, and by the end of that meeting they will know exactly what we are going to do, how long it will take, and what it will cost. There are no surprises and no pressure.
For Medi-Cal planning specifically, that first conversation typically goes deeper than a standard estate planning conversation. We want to understand the family’s full picture — the home, the retirement accounts, the savings, the health situation of the parent or spouse who may eventually need care, the family members who will be involved in decisions. We want to understand timing. We want to understand the goals. And we want to design a plan that addresses Medi-Cal eligibility as part of a broader, integrated estate plan — not as an afterthought.
What we have learned over 20 years of practice is that families who do this well are the families who started the conversation early. They are the families who came to us not because they had a crisis, but because they had a parent in their 70s and wanted to be ready. They are the families who treated this as part of their estate planning, not as a separate problem to be solved later.
If you have a parent who may eventually need long-term care, or if you are thinking about your own potential long-term care needs, the time to begin is well before care is needed. The reinstated 2026 rules make that more important, not less.
For East Bay Families
If you live in Walnut Creek, Concord, Pleasant Hill, Lafayette, Orinda, Moraga, Danville, San Ramon, or anywhere across the East Bay, and you have a parent in their 70s or 80s, this is the conversation that matters most for your family in 2026. It is not the headline conversation about federal estate tax. It is not the conversation about probate thresholds. It is the conversation about long-term care, Medi-Cal eligibility, and the planning that has to happen now if it is going to work later.
At Absolute Trust Counsel in Walnut Creek, our team works exclusively with California families on estate planning, trust administration, probate, Medi-Cal planning, and special needs planning. For over 20 years as an estate planning attorney, my focus has been on helping East Bay families build plans that actually work in practice — including the parts of the plan that protect families when long-term care is needed.
If you have questions about how the 2026 Medi-Cal changes affect your family, or if you have been thinking it might be time to put a plan in place, we would welcome a conversation.
Estate planning addresses many important factors about your future and your legacy. Where do you get started if you don’t have an estate plan in place? If you do, how have new laws and life transitions changed it? Will your plan still protect you? Regardless of where you are, you deserve to have control over your wants, needs, goals, and hopes for the future. We can help you understand your options and, legally, how you will best be protected at all touchpoints. Get started today by scheduling a discovery call so we can discuss your needs. Visit https://absolutetrustcounsel.com/scheduling/ or call us at (925) 430-7990.
