In Short: California’s Medi-Cal program can file a creditor claim against a probate estate to recover long-term care costs paid for the deceased. That claim must be paid before heirs receive anything. With the 2026 reinstatement of the Medi-Cal asset test, more estates are now exposed to recovery — and the process can add months to an already slow probate.
When someone receives Medi-Cal benefits to cover nursing home care or in-home support services, the state keeps track of what it paid. After the beneficiary dies, California’s Department of Health Care Services (DHCS) has the legal right to recover those costs from the estate. If you are an heir waiting on a California probate, the state may be standing in line ahead of you.
In 2026, this became significantly more common. California reinstated the Medi-Cal asset test as of January 1, 2026, after a period when asset limits were removed. The new limits — $130,000 for individuals and $195,000 for couples — combined with a 30-month lookback period, mean more estates will face Medi-Cal recovery proceedings.
How Medi-Cal Recovery Works in a California Probate
Medi-Cal recovery is governed by California Probate Code and applies specifically to probate estates. When a personal representative opens a probate case and Letters Testamentary are issued, they are required to notify DHCS. The department then has a set window to submit a creditor claim.
If DHCS files a claim, it becomes a priority creditor. The estate must satisfy the Medi-Cal obligation before distributing anything to beneficiaries. In long-term care situations, that claim can run into hundreds of thousands of dollars.
The process also adds time. The estate cannot close until all creditor claims are resolved. In an already backlogged California probate system, this can push the timeline out by six months or more on top of the standard 12- to 18-month process. For a full overview of how the advance process works while you wait, see our guide on how California probate advances work.
What the 2026 Medi-Cal Changes Mean for Heirs
The reinstatement of the Medi-Cal asset test is the most significant change California probate heirs have seen in years. During the period when asset limits were removed, many seniors receiving long-term care held onto assets that would previously have disqualified them. Now those estates are subject to recovery.
The new 30-month lookback rule adds another layer. If assets were transferred within 30 months of a Medi-Cal application, the state may challenge those transfers. For heirs who received gifts from a parent or grandparent in recent years, this is worth discussing with a probate attorney before assuming the estate is clear.
One important point: Medi-Cal recovery in California is limited to probate estates. Assets held in a properly funded living trust, in joint tenancy, or with a transfer-on-death deed generally pass outside of probate and are not subject to DHCS recovery. But if the estate is going through full probate, the recovery risk is real.
How a Medi-Cal Claim Affects Your Inheritance
When DHCS files a creditor claim, the executor must account for it when calculating final distributions. Heirs may receive less than expected — sometimes significantly less. And the probate closes later.
For heirs counting on a specific amount, a Medi-Cal creditor claim can be a hard surprise. The estate may have substantial real property value but still be cash-poor during the process. Property taxes, maintenance costs, and legal fees keep piling up while the DHCS claim is reviewed and resolved.
If you are a beneficiary in a California probate case and need funds while the estate works through creditor claims, a probate advance from ProbateLend may help. We advance funds against your expected inheritance share regardless of pending claims. Apply here to check your eligibility.
What You Should Do If There Is a Medi-Cal Claim on the Estate
Start by reviewing the probate filings. Once Letters are issued, the personal representative should have received — or will receive — any DHCS creditor claim. As a beneficiary, you have the right to review those documents.
Second, talk to a probate attorney. The amount DHCS claims is not always final. Claims can sometimes be reduced or challenged, particularly when the estate involves a surviving spouse, a disabled heir, or a minor child. Find an attorney in our California probate attorney directory.
Third, understand that your timeline has changed. If a creditor claim is in play, probate is not closing on the schedule you may have anticipated. Planning around that — including looking at a probate advance if you have immediate financial needs — is a practical step.
Get a Probate Advance While You Wait
A Medi-Cal claim does not prevent you from getting a probate advance. ProbateLend works with heirs in complex California probate cases every day, including situations involving creditor claims. There are no credit checks, no income requirements, and no monthly payments. The advance is repaid from your share of the estate when probate closes — not from your personal funds. If the estate comes up short, you are not personally liable for the difference. Learn more about what a probate advance costs before you apply.
Ready to get started? Apply for a California probate advance today — free application, no obligation.
Frequently Asked Questions
Can Medi-Cal take my entire inheritance in California?
Medi-Cal recovery is limited to the amount DHCS paid for the decedent’s care and cannot exceed the total value of the probate estate. If the estate is small, heirs may receive little or nothing after the claim is paid. If the estate is large, heirs typically still receive a share once the obligation is satisfied.
Does Medi-Cal recovery apply to assets in a living trust?
Generally no. California Medi-Cal recovery is limited to probate estates. Assets held in a properly funded living trust, in joint tenancy, or with a named beneficiary typically pass outside of probate and are not subject to DHCS recovery.
How long does a Medi-Cal creditor claim delay California probate?
Once DHCS is notified, it has a set window to file a claim. After a claim is filed, the estate must address it before distributing assets — a process that can add several months to the probate timeline, particularly if the claim amount is disputed.
Can I still get a probate advance if there is a Medi-Cal claim against the estate?
Yes. ProbateLend evaluates advances based on your expected individual inheritance share, not on creditor claims against the estate as a whole. If your share is sufficient to support an advance, we can move forward regardless of pending DHCS claims.
What is the Medi-Cal lookback period in 2026?
As of January 1, 2026, California reinstated a 30-month lookback period for Medi-Cal long-term care eligibility. Transfers made within 30 months of a Medi-Cal application may be reviewed and could affect the estate’s exposure to recovery claims.