QIM 31 | Part 5 of 5 | Elder Law & Medi-Cal Planning
A correction to something we got wrong, and the list of moves that are genuinely permitted.
A conversation between Ava and Michael
Ava:
Michael, I want to open this one with a correction, because we drafted something that was too strong.
Michael Benavides, Esq.:
We did, and it is worth owning. An earlier draft told families not to spend down by gifting to relatives. That was wrong.
CANHR expressly lists “gift money to family or friends” as a legitimate way to reduce countable assets, noting that a gift below the Average Private Pay Rate creates no long-term-care penalty.
Ava:
So gifting is fine?
Michael Benavides, Esq.:
Gifting is lawful and sometimes sensible, with conditions: watch the APPR threshold, watch whether the person is entering a nursing home, and watch the IRS side — CANHR flags the federal gift tax exclusion and recommends a tax professional. It is not forbidden. It is a tool with edges.
Ava:
What else is on the permitted list?
Michael Benavides, Esq.:
DHCS identifies transfers that do not jeopardise coverage: to your spouse
or for your spouse's sole benefit; to your blind or disabled child; and selling at full fair market value
— which is not really an exception, since a full-value sale is not a gift.
Ava:
And spend-down?
Michael Benavides, Esq.:
The most under-used tool available. CANHR's list: pay medical bills, buy clothes or household items including gift cards, pay rent in advance or pay down the mortgage, buy a non-countable asset such as a car if you do not own one or an irrevocable burial plan, make home repairs or buy furniture, pay off an auto loan, pay off other debts.
Ava:
So fixing the roof is a strategy.
Michael Benavides, Esq.:
Genuinely. A family over the limit with $40,000 of deferred maintenance has an obvious, entirely lawful move that improves the parent's living conditions and reduces countable assets at the same time. That is not a loophole. It is spending your own money on your own house.
Ava:
Married couples?
Michael Benavides, Esq.:
Ask about Spousal Impoverishment
by name. Where it applies, the couple is split into two households: the Medi-Cal spouse keeps up to $130,000 and the community spouse keeps the Community Spouse Resource Allowance — $162,660 in 2026, a figure that adjusts annually. That is a far larger combined shelter than the $195,000 same-household limit.
Ava:
Now the honest 'do not' list.
Michael Benavides, Esq.:
Three, narrower than our first draft. Do not move significant assets before you know your timeline and your numbers
— the same transfer is fine at $12,000 and penalised at $200,000. Do not add a child to a deed as a shortcut
— basis and reassessment consequences usually outweigh the benefit. Do not assume the trust handles it, which we covered in Part 3.
Ava:
And what should everyone do regardless?
Michael Benavides, Esq.:
Three things, none requiring a lawyer. Get the durable power of attorney for finances
signed while capacity is clear. Get a current cognitive assessment
documented. Write down the date and amount of every transfer
in the last three years. Those three items turn an expensive discovery process into a short conversation.
Ava:
Last word — and I want it to be the honest one.
Michael Benavides, Esq.:
The rules changed on January 1, 2026 and are scheduled to change again on July 1, 2027. Sources that should agree do not always agree at the edges, and the figures are republished annually. Most of the harm I see does not come from families doing forbidden things — it comes from families doing reasonable things on the wrong date, or relying on a number that moved.
Check your renewal month, check the current figures with your county, and get advice before you move anything large.
Disclaimer
Attorney advertising. General information about California law, not legal advice; reading it creates no attorney-client relationship. Medi-Cal eligibility is highly fact-specific, published figures including the asset limits, the Community Spouse Resource Allowance and the Average Private Pay Rate are updated periodically, and some points in this series are expressly identified as unsettled. Confirm current rules with DHCS or your county Medi-Cal office before acting. Michael Benavides, Esq. — California State Bar No. 270714. Ava Benavides is an editorial brand voice, not an attorney, and does not provide legal analysis.
