How Can Married Couples Protect Assets From Future Nursing Home Costs in California?
The possibility that you or your spouse may need nursing home care can create a frightening financial question: how can a couple pay for care without leaving the other spouse financially vulnerable? California couples can protect certain assets through Medi-Cal exemptions, spousal protections, careful asset management, and legally permitted transfers. Planning before long-term care becomes urgent can provide more options and help protect resources for the spouse who remains at home.
The Elder & Disability Law Firm, APC helps clients in Redlands and throughout Southern California, including Riverside, Rancho Cucamonga, and Palm Springs, with estate and long-term care planning. The firm can review your circumstances and explain planning options that may help protect your family's financial interests.
Use Medi-Cal Rules to Protect Your Assets
Medicare generally does not cover long-term custodial nursing home care, although it may cover qualifying skilled nursing facility care for a limited period. If you or your spouse may need significant long-term care, you may need to consider Medi-Cal eligibility and other ways to pay for care.
California restored asset limits for certain Medi-Cal applicants and members on January 1, 2026. According to the California Department of Health Care Services, through June 30, 2027, the asset limit is $130,000 for one person, plus $65,000 for each additional qualifying household member, up to the program limit. Different limits are scheduled to take effect July 1, 2027.
You and your spouse may also qualify for additional protections under Medi-Cal's spousal impoverishment rules. These rules are designed to help prevent a spouse who remains in the community from being left without sufficient resources when the other spouse needs institutional care.
Because eligibility rules and limits can change, your planning should be based on the rules in effect when you are preparing for or applying for benefits.
Know Which Assets Medi-Cal Does Not Count
Protecting your assets does not necessarily mean giving property away. Some assets are not counted when Medi-Cal determines eligibility, so it's important to understand what you and your spouse own before making any changes.
DHCS currently identifies several types of property that may not count, including a primary home, one vehicle, household belongings, and certain retirement funds when regular payments are being received. Other property, including cash, bank accounts, investments, additional vehicles, and second homes, may be countable.
You and your spouse should therefore review:
The family home: A primary residence may be exempt, including when a spouse continues living there.
Bank and investment accounts: Account balances and ownership should be reviewed to determine how they may affect eligibility.
Retirement accounts: Their treatment depends on the account and whether regular payments are received.
Additional real estate: Rental property, vacation homes, and other real estate may be treated differently from the primary residence.
Other valuable assets: Additional vehicles and financial resources may also affect the eligibility calculation.
Taking an inventory before care becomes necessary can help you distinguish between countable and noncountable property and avoid making unnecessary changes.
Protect Assets for the Spouse at Home
Medi-Cal rules include protections for a spouse who continues living in the community while the other spouse enters a nursing facility. Depending on your circumstances, you and your spouse may be able to divide assets in a way that allows the spouse needing long-term care to qualify while preserving resources for the spouse at home.
DHCS specifically advises married couples and registered domestic partners to ask about “Spousal Impoverishment” protections because higher asset allowances may apply.
Income protections can also matter. If you remain at home while your spouse receives nursing home care, you still need resources for housing, utilities, food, transportation, health care, and other daily expenses. Your long-term care planning should therefore consider the financial needs of both spouses rather than focusing only on the spouse entering a nursing facility.
The Elder & Disability Law Firm, APC can review how your assets and estate plan interact with these rules and identify issues that may need to be addressed before long-term care begins.
Avoid Transfers That Could Delay Medi-Cal
Giving money or property to children or other relatives can create Medi-Cal problems rather than solve them. California restored transfer-of-asset rules for long-term care beginning January 1, 2026.
If you or your spouse enters a nursing facility, Medi-Cal can examine certain transfers made during the preceding 30 months. Transfers of countable assets for less than fair market value made on or after January 1, 2026 may result in a penalty that delays Medi-Cal payment for long-term care.
However, not every transfer produces the same result. DHCS identifies permitted circumstances that include transfers to a spouse or someone acting for the spouse, transfers to a blind or disabled child, and sales for full value.
You should therefore avoid assuming that transferring a house, bank account, investment, or other property to a child is an easy way to qualify for Medi-Cal. The timing, recipient, value, and type of property can all matter.
Before transferring significant property, The Elder & Disability Law Firm, APC can help you evaluate how the proposed transfer may affect your long-term care planning and broader estate plan.
Protect Your Assets and Your Spouse’s Financial Future
You do not necessarily have to exhaust all assets before your spouse can receive Medi-Cal assistance for nursing home care. Exempt assets, spousal protections, and permitted planning strategies may help preserve resources, but the correct approach depends on your property, income, family circumstances, and the Medi-Cal rules in effect at the time.
The Elder & Disability Law Firm, APC helps married couples evaluate their estate planning and long-term care concerns before care becomes urgent. The firm can review your assets, existing planning documents, and potential Medi-Cal issues to help you understand your options.
Based in Redlands, the estate planning firm serves clients throughout Southern California, including Riverside, Rancho Cucamonga, and Palm Springs. Schedule a consultation today to discuss how advance planning may help protect your family's financial future from potential nursing home costs.