What Assets Are Exempt From Medi-Cal in California?

In California, the assets exempt from Medi-Cal include your primary home, one motor vehicle, household goods and personal effects, retirement accounts that are in payout status, and burial funds set aside under specific rules. Everything else you own with monetary value is countable, and starting January 1, 2026, countable assets are capped at $130,000 for a single applicant, with $65,000 added for each additional household member.¹

Who the Asset Test Applies To

The exemption list matters only if you fall into a group Medi-Cal actually asset-tests. As of 2026, the test applies if you are 65 or older, living with a physical, mental, or developmental disability, residing in a nursing home, or in a family whose income is too high to qualify under the federal tax-based (MAGI) rules.²

Non-elderly, non-disabled adults who qualify through the MAGI pathway are still evaluated on income alone. Their assets are not counted at all, and the categories below are effectively academic for them.

If you already had Medi-Cal before 2026, you’ll report your assets at your next renewal. Exceeding the limit at that point can end your coverage. New applicants report on the initial application.

Your Primary Home

The home where you live is exempt from the asset calculation regardless of market value. Under California regulations, a home qualifies as your principal residence if you currently live there, or if you are temporarily absent and have stated in writing that you intend to return.³ The written-intent rule is what preserves the exemption for people who enter a nursing facility but plan to return home.

For applicants seeking nursing home coverage, federal law adds a home equity cap. In 2026, the federal minimum equity limit is $752,000 and the maximum is $1,130,000, and states choose where within that range to set their threshold.⁴ Equity above the applicable limit can affect long-term care eligibility even when the home is otherwise exempt. The cap does not apply if your spouse or a dependent child lives in the home.

A second home is a countable asset. So is any real estate you do not use as your principal residence.

One Motor Vehicle

One vehicle is exempt regardless of its fair market value, as long as someone in your household uses it for transportation.⁵ Even if you no longer drive, the vehicle stays exempt when other household members use it to meet your transportation needs.

A second vehicle can also be excluded in narrow situations: if it is necessary for a household member’s employment, required for regular medical treatment, or specially equipped for a person with a disability. Beyond those exceptions, additional vehicles are countable, and their equity value is measured against your limit.²

Household Goods, Personal Effects, and Jewelry

Furniture, appliances, electronics, and other items you use daily in your home are fully exempt with no dollar cap. Clothing is exempt without limit.

Jewelry is treated more specifically. Wedding and engagement rings are always exempt, and so are heirlooms. Other jewelry is exempt only if its net market value is $100 or less per item.⁶ You are not expected to provide appraisals for standard household contents during the application.

Retirement Accounts in Payout Status

IRAs, 401(k) plans, and similar retirement accounts are exempt when the account is in payout status, meaning you are receiving regular periodic distributions that include both principal and interest. Once the account is in payout status, the principal balance stops counting as an asset.²

There is a trade-off worth understanding before you flip that switch. Each distribution counts as income in the month you receive it. California determines Medi-Cal eligibility using current monthly income for most non-MAGI groups, so a large monthly withdrawal can push you over the income threshold. If you’re considering starting distributions to shelter the principal, work the math on both sides: the asset you shield and the income it creates.

A retirement account that is not in payout status is a countable asset at its full current value.

Burial Funds and Plots

California offers several ways to protect money set aside for funeral and burial costs.

Money placed in an irrevocable burial trust, burial insurance with no cash surrender value, or securities from a licensed cemetery authority that can only be converted into funeral payments are fully exempt with no dollar cap.⁷
Revocable burial funds are exempt up to $1,500 per person, including burial trusts, prepaid contracts, or any separately identifiable account clearly earmarked for funeral expenses.
One burial plot per immediate family member is exempt.
Interest and appreciation on an exempt burial fund stay exempt as long as they accumulate within the fund rather than being withdrawn.

Irrevocable trusts are the more powerful planning tool because they shelter unlimited amounts. The trade-off sits in the name: once you fund the trust, you cannot take the money back for any other purpose.

Spousal Resource Allowance

When one spouse needs nursing home care and the other stays at home, the community spouse can keep a separate pool of assets that does not count against the applicant. In 2026, California’s community spouse resource allowance (CSRA) is $162,660.⁸ On top of that allowance, the community spouse keeps the home (as long as they live in it), one vehicle, and all exempt personal property.

Married couples and registered domestic partners may also split ownership of assets between them, which can help one spouse fall under the $130,000 individual limit while the other retains property under the CSRA.²

What Still Counts

Everything that isn’t specifically exempt is countable. That includes money in checking and savings accounts, cash on hand, second homes and other real estate, second vehicles, stocks, bonds, mutual funds held outside a retirement account, and retirement accounts that are not yet in payout status. The location doesn’t help: accounts held out of state or in another country still count.²

If your countable assets exceed $130,000 for one person or $195,000 for two, your application will be denied, or existing coverage may end at renewal. Larger households add $65,000 per person up to ten family members.

The Exemption That Doesn’t Survive Your Death

An asset being exempt during your lifetime is not the same as it being protected after you die. California can seek reimbursement from your estate for Medi-Cal benefits received on or after your 55th birthday, limited to nursing home services, home and community-based services, and related hospital and prescription drug costs incurred while you were receiving those services.⁹

California uses a narrow definition of estate: recovery reaches only assets that pass through probate. Property that bypasses probate through a living trust, joint tenancy, beneficiary designations, or life insurance is generally outside the state’s claim. The primary home is where this hits hardest, because if it’s the main probate asset, the state will file against it. Transferring the home into a living trust, holding title in joint tenancy, or qualifying for the caregiver child exception before entering a nursing home are the common strategies, each with control, tax, and transfer-penalty consequences that make an elder law consultation worthwhile before you move anything. A hardship waiver may also be available to heirs if recovery would force them onto public assistance or deprive them of a primary residence.¹⁰

1
DHCS – CA.gov. DHCS Trailer Bill Legislation – Reinstatement of the Medi-Cal Asset Limit Fact Sheet
2
DHCS – CA.gov. Asset Limit Frequently Asked Questions
3
Cornell Law School. Cal. Code Regs. Tit. 22, 50425 – Property Used As a Principal Residence
4
Centers for Medicare and Medicaid Services. 2026 SSI and Spousal Impoverishment Standards
5
Cornell Law School. Cal. Code Regs. Tit. 22, 50461 – Motor Vehicles
6
Legal Information Institute (LII) / Cornell Law School. Cal. Code Regs. Tit. 22, 50467 – Personal Effects
7
Legal Information Institute. Cal. Code Regs. Tit. 22, 50479 – Burial Funds
8
DHCS – CA.gov. DHCS Medi-Cal Eligibility Letter 26-02
9
DHCS – CA.gov. Medi-Cal Estate Recovery Brochure
10
ASPE. Medicaid Estate Recovery