Medi-Cal Estate Recovery: What Families Should Know
After a Medi-Cal long-term-care recipient passes away, California can seek reimbursement from their estate. Whether that reaches a family home or other assets depends heavily on how those assets were titled — and this is exactly the kind of planning where a properly funded trust or other legal structure, set up well before a Medi-Cal application, can make a real difference.
What estate recovery is
After a Medi-Cal long-term-care recipient dies, California’s Department of Health Care Services (DHCS) can seek reimbursement from the deceased person’s estate for certain services they received at age 55 or older — primarily nursing facility care and home/community-based waiver services, along with related hospital and prescription costs.
Source: Welfare & Institutions Code §14009.5, DHCS’s own Estate Recovery Program page, and CANHR Fact Sheet #45.
Since 2017, recovery is limited to the probate estate
A 2017 law change (SB 33/SB 833) narrowed California’s recovery to only what federal law requires, and limited it to the probate estate only — not the broader “expanded estate” California used to be able to reach.
That means assets that pass outside probate — a properly funded living trust, joint tenancy property, transfer-on-death deeds, beneficiary-designated accounts — are generally not reachable by an estate recovery claim.
The catch: the asset has to actually avoid probate
This protection only works if the asset actually avoided probate in practice — not just on paper. A home that was supposed to go into a living trust, but was never actually deeded into it, is still a probate asset and still exposed to a recovery claim.
Your trust has to actually be funded, not just signed. This is one of the most common and most costly estate-planning mistakes — see our estate planning documents guide for more on funding a trust properly.
When no recovery is permitted
No recovery is permitted if the deceased is survived by:
- a spouse or registered domestic partner,
- a child under 21, or
- a blind or disabled child of any age.
Two waivers also exist:
- A discretionary hardship waiver — must be requested within 60 days of the claim notice.
- A mandatory waiver for a “homestead of modest value” — a home worth 50% or less of the county’s average home price at the date of death.
Two separate questions: exempt now vs. protected later
A home is exempt from the Medi-Cal eligibility asset count while the recipient is alive, based on intent to return home — no proof of actual ability to return is needed (Welfare & Institutions Code §14006(b)). That’s a rule about qualifying for Medi-Cal while you’re living.
Estate-recovery protection after death is a separate question. Being exempt now does not automatically protect the home from recovery later if it’s still a probate asset at death. Families often conflate these two — don’t assume the exemption you have during life carries over automatically once the person passes away.
Coming (but not yet in effect): a federal home-equity cap
California’s home-equity limit for Medi-Cal eligibility is currently uncapped — there is no equity limit today. But a federal law (H.R.1, the 2025 reconciliation act) requires states to implement a $1,000,000 home equity cap by October 1, 2028. That’s likely to change how this works in about two years — worth flagging now if you’re doing longer-range planning, even though it isn’t in effect yet.
This is general information, not financial or legal advice. Whether a given asset is protected depends on exactly how and when it was titled or funded — talk to an elder-law attorney before assuming your home or any other asset is protected from estate recovery. See also current Medi-Cal asset limits and transferring assets before applying.
Want this checked against your specific numbers? Our free Care Financing Roadmap asks a few questions about your assets, income, veteran status, and insurance, then tells you exactly which paths apply to you.