California Medicaid estate recovery, run through the Medi-Cal Estate Recovery Program (MERP), can reach only one thing in 2026: assets that pass through probate. If the family home transfers outside probate, the California Department of Health Care Services (DHCS) has nothing to attach to. Recovery is also limited to long-term-care services received at age 55 or older, barred entirely when a surviving spouse or registered domestic partner is alive, and subject to several hardship waivers. So for most California families who plan even a little, the practical recovery exposure on the home is zero. This guide walks the 2026 framework: what California still recovers, what it never can, the hardship waivers, the notice timeline, and the planning tools that keep the home out of probate.

What California Medicaid Estate Recovery Covers

SB 833 limited California's MERP to the federal floor and nothing more: under §14009.5(f)(4), "health care services" means only those services required to be recovered under 42 U.S.C. §1396p(b)(1)(B)(i). DHCS states that for members who died on or after January 1, 2017, repayment "will be limited to payments made, including managed care premiums paid, for nursing facility services, home and community based services, and related hospital and prescription drug services received when the beneficiary was an inpatient in a nursing facility or received home and community based services."

Service Recoverable in California?
Nursing-facility services (age 55+) Yes, federally mandatory
Home- and community-based waiver services age 55+ (including the Assisted Living Waiver) Yes, federally mandatory
Hospital and prescription drugs received while on long-term care (age 55+) Yes, federally mandatory
Managed-care premiums DHCS paid on the member's behalf while they were in a nursing facility or receiving HCBS (age 55+) Yes, DHCS names "managed care premiums paid" in the recoverable set
In-Home Supportive Services (IHSS) personal care No, excluded from the State's claim (DHCS ACWDL 02-35)
Managed-care or general Medi-Cal services for non-long-term-care enrollees No, outside the post-SB 833 recoverable list
Medicare Savings Program cost-sharing (QMB/SLMB/QI) No, carved out by 42 U.S.C. §1396p(b)(1)(B)(ii)
Any service received before age 55 No, statutory cutoff

Two limits inside that sentence do a lot of work. The trailing clause confines the hospital and prescription-drug charges DHCS can reach to the ones tied to the long-term-care episode, rather than every hospital stay and prescription of a long life. The managed-care clause cuts the other way: where the member was enrolled in a Medi-Cal managed-care plan while in a nursing facility or on HCBS, the capitation premiums DHCS paid on their behalf during that period are recoverable, not just the bills for care actually delivered.

Federal law also offers states a second, wider option: recovery for "any items or services under the State plan," which 42 U.S.C. §1396p(b)(1)(B)(ii) leaves "at the option of the State." The Legislature's stated intent in SB 833 was to "limit Medi-Cal estate recovery only for those services required to be collected under federal law," so California declined it and recovery in 2026 is concentrated on long-term care. In-Home Supportive Services are excluded entirely: DHCS guidance states that for recipients who died after September 1, 2000, IHSS is not included in the State's claim.

What California Cannot Recover From: The Probate-Only Rule

The single most important rule in California estate-recovery planning is this: California recovers only against the recipient's probate estate. Under §14009.5(f)(3), the recoverable estate is "all real and personal property and other assets in the individual's probate estate." Federal law lets states expand that definition to reach non-probate assets; California declined the option, so any asset that bypasses probate is beyond DHCS's reach.

Asset / Mechanism California Statute or Rule Effect on Estate Recovery
Revocable Transfer on Death (TOD) Deed Probate Code §§5600–5696 Home transfers automatically at death; no MERP
Joint tenancy with right of survivorship Civil Code §683 Survivor takes outside probate; no MERP
Beneficiary-designated retirement accounts (IRA, 401(k), 403(b)) Federal ERISA + Internal Revenue Code §401 Pass directly to beneficiary; no MERP
Beneficiary-designated life insurance Insurance Code §10172 et seq. Proceeds pass to beneficiary; no MERP
Payable-on-death (POD) bank accounts Probate Code §5302 Pass directly to beneficiary; no MERP
Revocable living trust (home actually retitled to the trust) Probate Code §15800 et seq. No MERP when the trust is properly funded
Irrevocable trust (no retained interest) Probate Code §16100 et seq. Outside the settlor's estate; no MERP if compliant with transfer rules
Community property with right of survivorship Civil Code §682.1 Survivor takes outside probate; no MERP

The TOD Deed, covered in detail below, is the most accessible of these for a family that owns a home and little else. One caution applies across every technique in this guide: a hardship does not exist when the decedent or applicant created it by using estate-planning methods specifically to divert or shelter assets to avoid recovery (22 CCR §50963(d)). Keeping the home out of probate is lawful; structuring transfers expressly to defeat a hardship claim is not. Coordinate planning with a California elder-law attorney.

SB 833 (2016): The Reform That Reset California MERP

Every Medi-Cal member who dies on or after January 1, 2017 is governed by SB 833 (Stats. 2016, Ch. 30, Sec. 22), which added the current text of §14009.5. It made four sweeping changes:

  1. Limited recovery to the federal mandatory floor of nursing-facility, HCBS, and related hospital and prescription-drug services, rather than the broader pre-2017 set.
  2. Prohibited recovery when a surviving spouse, registered domestic partner, child under 21, or blind or disabled child exists (§14009.5(b)(2)(B)).
  3. Limited the recoverable estate to the probate estate, ending recovery against assets that pass outside probate, including a properly funded revocable living trust.
  4. Directed DHCS, subject to federal approval, to waive its claim as a substantial hardship when the estate is a homestead of modest value (§14009.5(c)(2)).

Mandatory Bars and the Homestead-of-Modest-Value Waiver

DHCS may not pursue a claim at all when certain survivors exist.

Situation Authority Effect
Surviving spouse §14009.5(b)(2)(B)(i) No claim filed; statutory bar
Surviving registered domestic partner §14009.5(b)(2)(B)(i); §14009.5(a)(4) No claim filed; the same statutory bar as a spouse for deaths on or after January 1, 2017
Surviving child under 21 §14009.5(b)(2)(B)(ii) No claim filed
Surviving blind or disabled child of any age §14009.5(b)(2)(B)(iii) No claim filed
Homestead of modest value §14009.5(c)(2), (f)(5) Home valued at 50% or less of the county average home price as of date of death; waived as a substantial hardship, subject to federal approval
Recipient under age 55 when services were received §14009.5(b)(2)(A) No recovery for those services
Medicare Savings Program cost-sharing 42 U.S.C. §1396p(b)(1)(B)(ii) Carved out of recovery

One point deserves care, because the published guidance genuinely conflicts. The bar under §14009.5(b)(2)(B) is flat for a surviving spouse and, for deaths on or after January 1, 2017, equally flat for a surviving registered domestic partner: §14009.5(a)(4) records the Legislature's intent to "Prohibit recovery from the estate of a deceased Medi-Cal member who is survived by a spouse or registered domestic partner." But the regulation at 22 CCR §50963(b), last amended in 2015 and never conformed to SB 833, still describes a deferral for partners, with the claim revived against the partner's estate on their later death. The later statute controls for a post-2017 death, so the bar governs. A surviving partner should still ask DHCS to confirm it in writing, since a case worker may be reading the unamended regulation.

The Hardship Waivers

Even when no statutory bar applies, an heir can request a hardship waiver under §14009.5(c) and 22 CCR §50963. DHCS must waive the applicant's proportionate share of the claim if any of the regulation's criteria apply, on the Application for Hardship Waiver (DHCS form 6195). DHCS must issue a written decision within 90 days of the application.

Homestead of modest value

If the home's fair market value is 50% or less of the average price of homes in the county as of the date of death, §14009.5(c)(2) directs DHCS to waive its claim as a substantial hardship, subject to federal approval. The threshold is calibrated to county economics rather than a statewide figure, so in high-cost counties the same 50% test can reach substantially higher home values. The comparison is to the county average as of the date of death, not the date of purchase or the date the claim arrives.

Caregiver who delayed institutionalization

Recovery is waived for an applicant who provided care to the decedent for two or more years that prevented or delayed admission to a medical or long-term-care institution, provided the applicant resided in the decedent's home during the period of care and continues to reside there (22 CCR §50963(a)(4)). Documentation includes written medical substantiation from a licensed health care provider confirming that the care delayed institutionalization.

Aged, blind, or disabled co-resident heir

Recovery is waived for an aged, blind, or disabled applicant who continuously lived in the decedent's home for at least one year before death, continues to reside there, and is unable to obtain financing to repay the State (22 CCR §50963(a)(3)). Submit evidence of the inability to obtain financing with form DHCS 6195.

The remaining grounds

Section 50963(a) lists six criteria in all, and any one of them is enough. Beyond the two above, recovery is waived where allowing the applicant to receive the inheritance would let them discontinue eligibility for public-assistance and/or medical-assistance programs (22 CCR §50963(a)(1)); where the estate property is part of an income-producing business, including a working farm or ranch, and recovery would cost the applicant their primary source of income (§50963(a)(2)); where the applicant is the person who transferred the property to the decedent for no consideration (§50963(a)(5)), an easily missed ground for a child who deeded the family home to a parent years earlier; or where equity in the real property is needed to make it habitable or to acquire the necessities of life, such as food, clothing, shelter, or medical care (§50963(a)(6)).

The Notice and Claim Timeline: How Recovery Actually Works

When a Medi-Cal recipient dies, the estate's representative has a notice duty, and DHCS has a defined window to act.

1
Step 1

Death of the recipient

A claim is possible only if the recipient was age 55 or older and received nursing-facility, HCBS, or related hospital or prescription-drug services.

2
Step 2

Notice to DHCS within 90 days

Under California Probate Code §9202(a), not later than 90 days after letters are first issued to the personal representative, the representative or estate attorney must give the DHCS Director notice of the death (in the manner of Probate Code §215 or through the DHCS online notice-of-death form) when the decedent received Medi-Cal or was the surviving spouse of someone who did. DHCS separately instructs whoever is handling the decedent's affairs to send its Director a notice of death, with a copy of the death certificate, within 90 days of the date of death. Those are two different clocks, and the DHCS one usually runs out first, so work to whichever deadline comes first.

3
Step 3

DHCS has four months to file a claim

Probate Code §9202(a) gives the Director four months after notice is given in which to file a claim. If DHCS finds no recoverable services, no claim is filed.

4
Step 4

The heir weighs the options on a claim

Heirs can request a hardship waiver on one or more grounds, accept a voluntary post-death lien rather than sell the home, negotiate a settlement, pay the claim from estate proceeds, or contest the amount.

5
Step 5

A hardship-waiver decision comes within 90 days

A request for a hardship waiver must reach DHCS within 60 days of the date on the DHCS claim letter, and DHCS must issue its written decision within 90 days of the application (22 CCR §50963(f)).

A case can end in no recovery at several points: a protected survivor bars the claim, there are no recoverable services, the assets passed outside probate, the home qualifies as a homestead of modest value, or a hardship waiver is granted. A claim has to clear all of them to reach anything, so what is left is the narrow case: no protected survivor, a home worth more than half the county average, assets that actually pass through probate, and an heir who cannot establish a hardship ground. The California Advocates for Nursing Home Reform (CANHR) and Justice in Aging publish consumer guidance on these cases.

The Voluntary Post-Death Lien Option

For families who cannot pay a recovery claim immediately but want to keep the home rather than sell it, California recognizes a voluntary post-death lien under §14009.5(d), which lets the debt ride on the property instead of forcing a sale to satisfy the claim now.

By statute, that lien accrues interest at the lower of two rates: the annual average rate earned on investments in the Surplus Money Investment Fund in the calendar year before the year of death, or simple interest at 7 percent per annum. Two cautions. It attaches only after the member has died and only with the heir's agreement, so it is not the same instrument as a pre-death TEFRA lien. And because interest runs, the amount owed grows for as long as the lien sits there. Get the specific terms in writing from DHCS before signing (the applicable rate, what triggers repayment, and how it interacts with a hardship waiver), and have an elder-law attorney read the agreement.

Asset-Transfer Interaction: The 2024–2025 Window and the Returning Look-Back

California's temporary elimination of the asset test created a window in which transfers were not reviewed. Per DHCS All-County Welfare Directors Letter (ACWDL) 25-18, counties shall not request verification, review electronic asset verification, or calculate any period of ineligibility for transfers made on or after January 1, 2024 through December 31, 2025, because the asset test did not apply then. An asset that left the recipient's name during that window is not part of the probate estate at death and is therefore outside the recovery framework.

That window closed with the calendar. Assembly Bill (AB) 116, the 2025-26 Health Omnibus Bill, amended Welfare & Institutions Code §14005.62 to restore the Non-MAGI property limits effective January 1, 2026. Note that AB 116 is the asset-limit authority, not the look-back authority; the two are often confused. Transfers made on or after January 1, 2026 are reviewable again. Beginning July 1, 2026, the number of months DHCS must review increases by one each month, until the full 30-month review applies to long-term-care applications and members entering long-term care on or after July 1, 2028. California's look-back is 30 months, shorter than the federal look-back date of 36 months (or 60 months for any disposal of assets made on or after February 8, 2006), and the maximum period of ineligibility is likewise 30 months from the date of the transfer. Counties do not need to follow up when electronic asset verification shows a transfer under the statewide Average Private Pay Rate (APPR) for nursing-facility care, or when the individual was within the asset limits on the date of the transfer. That is a screening threshold for county follow-up, not a statutory safe harbor, so do not treat a below-APPR transfer as guaranteed penalty-free. Our California asset-limits guide carries the current property limits.

California Planning Techniques That Reduce MERP Exposure

Because recovery reaches only the probate estate (§14009.5(f)(3)), the practical question for most families is whether the home passes through probate or around it. Three mechanisms keep it out, none of which requires sophisticated trust planning.

Technique 1: Revocable Transfer on Death (TOD) Deed

Under Probate Code §§5600 et seq., a California homeowner can record a Revocable Transfer on Death Deed naming an individual or trust as beneficiary. The deed has no effect on Medi-Cal eligibility, stays revocable during the homeowner's lifetime, removes the home from the probate estate at death, and preserves the stepped-up basis under Internal Revenue Code §1014. Recording requires notarization and a filing with the county recorder. Because beneficiary structure can affect a Medi-Cal-eligible heir, confirm the plan with a California elder-law attorney.

Technique 2: Revocable Living Trust paired with a TOD Deed

A common belt-and-suspenders approach pairs a revocable living trust with a TOD Deed naming the trust as beneficiary, so that if either mechanism succeeds, the home stays out of probate. The trust holds bank and brokerage accounts and personal property; the TOD Deed handles the home; beneficiary designations handle retirement accounts and life insurance.

Technique 3: California Partnership for Long-Term Care

The California Partnership for Long-Term Care is a state program that pairs qualified private long-term-care insurance with Medi-Cal, so that benefits paid by the policy earn a matching amount of asset protection when the policyholder later applies for Medi-Cal. It is a long-horizon tool: it only helps a family that bought a qualifying policy years before the need arose, and it does nothing for a family facing a claim today. Its terms are set by the program rather than by the estate-recovery statute, so confirm them directly with DHCS and the California Department of Insurance.

Common Misconceptions About California MERP

Misconception Reality
"Medi-Cal will take the house if Mom enters a nursing home" Recovery happens only at death, and only against the probate estate. Entering a facility puts nothing at risk during her lifetime. Whether the home counts toward the restored 2026 property limits is a separate eligibility question; see our asset-limits guide.
"Medi-Cal will recover everything Mom received over her lifetime" Only nursing-facility, HCBS, and related hospital and prescription-drug services at age 55+, plus managed-care premiums paid during that care. Other services are excluded.
"A recovery claim is the end of the matter" Six hardship grounds (22 CCR §50963(a)) and the homestead waiver can each erase the claim, and a voluntary post-death lien can keep the home instead of forcing a sale.

Common Pitfalls

These pitfalls track the rules above under California Medicaid estate recovery (§14009.5; 22 CCR §50963).

  1. Failing to record a TOD Deed before incapacity. A TOD Deed must be signed and recorded while the recipient has legal capacity. Once dementia progresses, it can no longer be executed without a conservatorship.
  2. Assuming joint tenancy is the same as community property with right of survivorship. Both bypass probate, but community property with right of survivorship preserves a full stepped-up basis on the whole asset at the first spouse's death, while joint tenancy steps up only half.
  3. Missing the 60-day hardship-waiver request window. A hardship-waiver request must reach DHCS within 60 days of the date on the claim letter.
  4. Confusing the 2024–2025 transfer window with a permanent rule. Transfers in that window were not reviewed; transfers on or after January 1, 2026 are subject to the look-back as it ramps to 30 months by July 1, 2028.

Frequently Asked Questions

Will Medi-Cal take Mom's house in California?

Probably not, if the home stays out of probate. A recorded Transfer on Death (TOD) Deed, a properly funded trust, or beneficiary designations keep it beyond the Department of Health Care Services' reach.

Are In-Home Supportive Services (IHSS) hours subject to estate recovery?

No. For recipients who died after September 1, 2000, IHSS is not included in the State's claim, so a recipient can have years of IHSS hours without MERP exposure for those services.

My dad died years ago and my mom is still alive. Will Medi-Cal come after the house when she dies?

No. A surviving spouse is a statutory bar under §14009.5(b)(2)(B), and the same bar covers a surviving registered domestic partner for deaths on or after January 1, 2017.

Is the homestead-of-modest-value waiver automatic?

No. Section 14009.5(c)(2) directs the Department of Health Care Services to waive its claim, subject to federal approval, when the estate is a home worth 50% or less of the county's average home price as of the date of death. It is a substantial-hardship waiver: the home must qualify, and somebody has to apply for it on form DHCS 6195.

Is a revocable living trust enough to avoid MERP?

Only if the home is actually retitled into the trust. The trust document alone does nothing if the deed still shows the recipient's individual name. Many families pair the trust with a Transfer on Death (TOD) Deed for redundancy.

California Estate-Recovery Resources

DHCS Estate Recovery Section Files the state's claim and processes hardship waivers; submit the notice of death and get hardship-waiver form DHCS 6195 here. www.dhcs.ca.gov/services/Pages/TPLRD_ER_cont.aspx
CANHR (California Advocates for Nursing Home Reform) Free consumer counseling on Medi-Cal estate recovery, hardship waivers, and home-protection planning. canhr.org
Justice in Aging Legal advocacy and plain-language guides on Medi-Cal eligibility and estate recovery. justiceinaging.org
State Bar of California Lawyer Referral Find a Certified Elder Law Attorney (CELA) to plan the home transfer and respond to a claim. www.calbar.ca.gov
California Partnership for Long-Term Care Qualified Partnership long-term-care policy information; earned benefits give a dollar-for-dollar exclusion from estate recovery. www.dhcs.ca.gov/services/ltc/Pages/CPLTC.aspx

The controlling law is online to read directly: Welfare & Institutions Code §14009.5 (the MERP statute), California Probate Code §9202 (notice to DHCS) and §5600 (TOD Deed), and 22 CCR §50963 (the substantial-hardship-waiver regulation).

Learn More

MedicaidCalifornia Medi-Cal OverviewCalifornia families' 2026 guide to Medi-Cal: AB 116 asset limits, Medi-Medi Plans, HCBS waivers, CalAIM, IHSS, estate recovery, and how to apply. MedicaidMedi-Cal Long-Term CareHow Medi-Cal pays for long-term care in California in 2026: share of cost, the asset limit and its July 2027 step-down, transfers, and spousal protection. MedicaidCalifornia Medi-Cal Asset LimitsCalifornia Medi-Cal asset limits returned January 1, 2026 at $130,000 individual / $195,000 couple under AB 116, and drop sharply July 1, 2027. See the rules. MedicaidMedi-Cal Eligibility & Income LimitsMedi-Cal income and asset limits for 2026: MAGI, the SSI pathway, Share of Cost for long-term care, spousal rules, and the asset test that ends 6/30/2027. MedicaidCalifornia IHSS GuideCalifornia IHSS pays spouses, parents, and adult children to give in-home care under Medi-Cal. 2026 wages, hours caps, the SOC 2298 tax break, and how to apply. MedicaidMedicaid Estate Recovery ExplainedMedicaid estate recovery explained: federal law, 51-state matrix, categorical protections, hardship waivers, and 2025-2026 reform updates. Verify before acting.
Your next step If you have received a Medi-Cal estate-recovery claim, or want to protect the home before one arrives, contact the DHCS Estate Recovery Section about the notice of death and hardship-waiver form DHCS 6195. Find personalized help at brevy.com.

The information on Brevy.com is for educational purposes only and is not a substitute for professional legal, financial, or medical advice. Rules vary by state and program and change frequently. Always verify with the relevant agency or a qualified professional. Brevy is not a law firm, financial advisor, or healthcare provider.

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Brevy Care Team

Expert eldercare guidance from Brevy's team of healthcare professionals and researchers.