How to Protect Assets From Medi-Cal in California? Complete Guide

📌 Quick Answer: To protect assets from Medi-Cal recovery in California, you can use tools such as trusts, gifting strategies, exempt asset planning, and proper estate planning. The key is to act before applying for benefits or during a healthy planning window, not after you’ve entered a nursing home.

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If you or a loved one may require long-term care, planning ahead is critical to protect your estate from Medi-Cal recovery. In California, Medi-Cal can seek reimbursement from your estate after your death, often placing your home or other valuable assets at risk. Fortunately, with the right legal strategies, you can qualify for benefits and still preserve assets for your family.

At Moravec, Varga & Mooney, we help clients create effective Medi-Cal asset protection plans that align with both eligibility rules and estate planning goals.

🏠 Why Does Medi-Cal Want Your Assets?

California’s Medi-Cal program can provide long-term care benefits to those with limited income and resources. But what many don’t realize is:

• Medi-Cal has the right to recover costs from your estate after you die.

• This recovery can include your home, savings, and other non-exempt assets.

• Recovery applies to people 55 and older who received certain Medi-Cal services, especially nursing home or long-term care benefits.

🛡️ Key Strategies to Protect Your Assets From Medi-Cal

✅ 1. Create an Irrevocable Medi-Cal Asset Protection Trust (MAPT)

Placing your home and other assets into an irrevocable trust removes them from your countable estate. This allows you to preserve them for your heirs while still qualifying for Medi-Cal.

• Must be created at least 30 months before applying for Medi-Cal

• Assets in the trust are not subject to estate recovery

• You can retain the right to live in the home without owning it

✅ 2. Transfer Assets Early (Gifting Strategy)

You may gift assets to loved ones well in advance of needing long-term care, keeping in mind:

• California has no look-back period for Medi-Cal eligibility, but a 30-month look-back applies to Long-Term Care Medi-Cal.

• Gifting too late can disqualify you or create recovery risk

• Always consult an attorney before transferring major assets

✅ 3. Convert Countable Assets Into Exempt Assets

Medi-Cal excludes certain assets from eligibility calculations, such as:

• One primary residence (with limits)

• Personal belongings, furniture, car

• Irrevocable burial plans

Planning strategies may include converting cash or savings into exempt items to reduce countable resources.

✅ 4. Use a Life Estate or Right of Occupancy

Granting a life estate in your home allows you to live there for life while preserving the remainder for your heirs. While less protective than a trust, it can still reduce recovery risk with careful timing.

✅ 5. Use Proper Estate Planning Tools

Wills and revocable trusts do not avoid Medi-Cal recovery. To be protected:

• Use irrevocable trusts

• Consider joint tenancy or beneficiary designations on certain assets

• Coordinate your estate plan with Medi-Cal rules

⚠️ What Not to Do

Avoid these common mistakes:

• Applying for Medi-Cal without planning—may trigger unnecessary estate recovery

• Transferring your home directly to children—can cause tax and legal issues

• Failing to update estate documents to reflect Medi-Cal considerations

👨‍⚖️ Final Thoughts

Medi-Cal planning is not just for the elderly—it's smart financial protection. If your estate includes a home or significant assets, you should consider your options before applying for Medi-Cal. The earlier you plan, the more options you have to preserve your legacy.

Contact Moravec, Varga & Mooney to build a strategy that protects what matters most. We can help you navigate California’s complex Medi-Cal rules and implement the right legal tools to safeguard your estate.