California’s legislative landscape continues to evolve, and 2026 brings several important changes that affect estate planning, probate proceedings, and asset protection strategies. From significant Medi-Cal eligibility changes to updated probate thresholds and new digital asset regulations, California residents need to understand how these developments may impact their families.
This comprehensive guide examines the key legislative changes for 2026 and provides guidance on what steps you should consider taking to ensure your estate plan remains effective under the new laws.
What new California laws in 2026 affect estate planning?
Medi-Cal Changes
The most significant changes come in Medi-Cal Changes with the return of strict limits as to what a person can have in order to be eligible Medi-Cal long term care, at $130,000 per person and $195,000 for a married couple. Added to this is a 30-month “lookback” rule which is designed to prevent urgent gifts and transfers just to qualify for benefits when they become needed. If the person / couple are expected to need help under the plan, advanced planning must take place years prior to the need in order to satisfy the eligibility requirements.
These changes underscore the importance of proactive planning. Families who anticipate the potential need for long-term care should consult with an experienced estate planning attorney well in advance to explore options such as irrevocable trusts and other asset protection strategies that comply with the new eligibility requirements.
Key Medi-Cal Changes:
- Asset limit: $130,000 per person, $195,000 for married couples
- New 30-month lookback rule for gifts and transfers
- Advanced planning must occur years before the need arises
Proposition 19 Status Update
Of questions often asked is whether there will be a reversal of the Prop 19 limitations on real property transfers. Prop 19 limitations only allow the parent to child exemption from the increase in property tax on the inherited property only up to 1.0m in property value and have strict limits regarding residency and how the property transfers when there is more than one beneficiary. At the present there is nothing on the horizon to suggest that there is an imminent change coming.
For families concerned about property tax implications when transferring real estate, understanding the current Prop 19 rules is essential. Proper deed transfers and strategic planning can help minimize the impact of these limitations.
Did California update its probate code for 2026?
The CA probate code is updated regularly, sometimes more than once a year, and for 2026 there were changes. The majority of the changes involve rules of guardianship, probate proceedings and Medi-Cal eligibility rules. The amounts that trigger a probate proceeding for personal property have risen from $184,500 to $208,850. Another change is an attempt to avoid a probate proceeding for a succession to a personal residence less than $750,000 when there is no other property and most importantly, all heirs are in agreement in writing as to who will inherit the property. Due to the lower threshold for residential real property and the fact that families will have to agree in writing how the property is to pass, this method is not likely to be used as often as the legislature likely planned for it to be used.
Key Probate Code Changes:
- Personal property probate threshold increased from $184,500 to $208,850
- New residential succession option for homes under $750,000
- Residential succession requires no other property in the estate
- All heirs must agree in writing on inheritance
- Updates to guardianship rules and Medi-Cal eligibility provisions
While the new residential succession option may help some families, the most reliable way to avoid probate remains establishing a properly funded revocable living trust.
How do new digital asset laws impact estate planning in California?
There are two specific impacts; 1) will be to require licensing of for Crypto businesses (to be effective 7/2026) and 2) there will be changes to the state’s Unclaimed Property Law to effectively keep the digital asset in it’s digital form, to prevent forced liquidation. This change would allow the continued growth in value for the asset, or of course in the alternative, the downfall of the asset if such a digital form were to experience a decline.
Key Digital Asset Changes:
- Crypto business licensing requirements effective July 2026
- Unclaimed Property Law changes preserve digital assets in their original form
- Prevention of forced liquidation of digital assets
- Digital assets can continue to grow (or decline) in value
As digital assets become an increasingly important part of family wealth, it is essential to address them in your estate plan. Your estate planning documents should include provisions for accessing and managing cryptocurrency, online accounts, and other digital property.
Do the 2026 California laws make probate easier or faster?
The law changes affecting a CA probate proceeding have a neutral effect on the timing of a proceeding, neither adding or eliminating time in this process. The existing problems remain; too few courtrooms to handle an ever increasing calendar of events. As the generation of the baby boomers age, absent a significant increase in the households utilizing the revocable living trust as their estate plan, there will continue to be longer, costlier delays in the handling of a decedent’s estate.
This reality makes trusts designed to avoid probate more valuable than ever. By establishing a revocable living trust and properly funding it with your assets, you can help your family avoid the delays, costs, and public nature of the probate process. For those who do face probate, working with an experienced attorney familiar with estate administration can help navigate the process as efficiently as possible.
What should I update in my estate plan due to new 2026 legislation?
All estate plans should be regularly reviewed to determine whether the plan is still going to perform as expected. This takes into consideration not just law changes, but also whether there needs to be changes to the successor trustees e.g., children are older now, former choices have grown older themselves or moved away, lost contact. There could be expanded family, perhaps the family wishes to now provide some gifts for grandchildren, charity, etc. Of course older estate plans likely include outdated tax provisions that, while cost saving when originally written, are likely to have more work and costs associated with them today while no longer providing the benefits originally sought.
Key Areas to Review in Your Estate Plan:
- Successor trustee designations (children may be older and more capable now)
- Former trustee choices who have aged, moved away, or lost contact
- Expanded family provisions for grandchildren or charitable giving
- Outdated tax provisions (such as A/B trusts) that may no longer provide intended benefits
- Medi-Cal planning considerations given the new eligibility rules
- Digital asset provisions and access instructions
For answers to common questions about trust planning, visit our FAQs about Revocable Living Trusts page.
The 2026 California legislative changes bring both challenges and opportunities for estate planning. The return of strict Medi-Cal eligibility limits and the new lookback rule require families to plan further in advance than ever before. Meanwhile, updated probate thresholds and new digital asset protections offer some relief, though court delays remain a persistent concern.
Key Points to Remember:
- Medi-Cal eligibility now limited to $130,000 per person ($195,000 for couples) with a 30-month lookback
- No changes to Prop 19 limitations are expected in the near future
- Personal property probate threshold increased to $208,850
- New residential succession option available for homes under $750,000 with heir agreement
- Digital asset laws provide new protections against forced liquidation
- Probate court delays continue, making trust planning more important than ever
- Regular estate plan reviews are essential to ensure your plan performs as expected
Schedule Your Free Consultation
Understanding how the 2026 California legislative changes affect your specific situation requires personalized guidance. At the Law Offices of David R. Schneider, we provide comprehensive estate planning services tailored to your family’s unique needs and goals.
With over 27 years of experience serving Southern California families, David R. Schneider personally works with each client to develop customized solutions that protect your legacy and provide peace of mind.
Contact Us Today:
- Phone: (805) 374-8777
- Email: dschneider@drs-law.com
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