Planning for Long-Term Care Costs in California

What care costs here

California is among the more expensive states for long-term care. The 2025 CareScout Cost of Care Survey reported a California median of roughly $182,000 per year for a private room in a nursing home, roughly $83,000 for assisted living, and roughly $92,000 per year for home care, against a national median for a private nursing home room of roughly $130,000.

Those are survey medians rather than quotes. Costs vary considerably by county, with coastal and Bay Area communities generally running above Central Valley and rural areas, and they change year to year. Treat them as a planning starting point and confirm current local figures for the communities you would actually consider.

The planning consequence is straightforward arithmetic. A cost at that scale, sustained over several years, is large enough relative to most retirement portfolios that it belongs in the income projection as a modeled scenario rather than as a worry held separately from the plan.

What Medicare does not cover

This is the single most common misunderstanding, and it is worth stating plainly. Medicare generally does not pay for ongoing custodial long-term care, meaning help with daily activities such as bathing, dressing, and eating, whether provided at home or in a facility.

What Medicare does cover is limited: skilled nursing care for a limited period following a qualifying hospital stay, and certain home health services under specific conditions. Those benefits are time-limited and condition-dependent, and they are not designed to fund years of custodial care.

The gap between that coverage and what extended care actually costs is the exposure that long-term care planning addresses. Confirm current Medicare coverage rules at Medicare.gov or with a licensed professional, since the details change.

How Medi-Cal differs

Medi-Cal is California's Medicaid program, and several of its rules differ from the federal baseline in ways that matter for planning. Because those rules are both technical and in transition, this section describes the structure of the decisions rather than current thresholds.

• Look-back period. California applies a shorter look-back period for asset transfers than the federal standard, and it is being phased in on a schedule running over several years. Transfers for less than fair market value within the applicable window may affect when coverage begins.
• Asset limits. California reinstated asset limits for non-MAGI Medi-Cal effective in 2026 after a period without them. The applicable figures are set by the state and change.
• Community spouse protections. Rules exist to protect a portion of assets and income for a spouse who remains at home, with amounts set annually.
• Estate recovery. California may seek recovery of certain long-term care costs from the estate of a deceased beneficiary, within limits set by state and federal law.

Every one of these is an eligibility question, which makes it legal work rather than financial planning work. Current thresholds are published by the California Department of Health Care Services and change; the application of any of them to your situation is a question for an elder law attorney.

Where trusts fit, and where they do not

A distinction worth getting right early: a revocable living trust is an estate administration tool, not an asset protection tool. Because the grantor retains control over the assets, a revocable trust generally provides no shelter from long-term care costs and does not by itself affect Medi-Cal eligibility analysis.

Irrevocable structures are different in kind and are sometimes used in long-term care planning, but they involve giving up control, they interact with the look-back rules, and they carry tax and practical consequences. Whether any such structure is appropriate is a legal determination that requires an attorney and, given the tax implications, a CPA as well.

One point does sit squarely in financial planning territory. Retirement accounts are generally not retitled into a trust, and an attempted transfer may create significant tax consequences. What is coordinated instead is the beneficiary designation, and making sure those designations agree with the estate documents is administrative work that is frequently left undone. Trust funding and titling covers that in more detail.

Who does what

No single professional covers both the legal and the financial side of this work. The practical question is not who to hire but how the roles divide and who owns the coordination between them.

A general description of roles. Titles, credentials, and scope vary by practitioner, and not every situation requires all five.

When these professionals operate separately, effective communication among them can become especially important. A coordinated planning process may help identify how a decision in one area affects another, which is the practical argument for putting the care scenario inside the retirement plan rather than beside it.

Paying for care

There are a limited number of ways to fund extended care, and most households end up using a combination. Each carries trade-offs worth weighing before care is needed rather than during a crisis.

• Self-funding from the portfolio. Preserves flexibility and control, and concentrates the risk on the household. Worth modeling as a multi-year scenario rather than assumed.
• Traditional long-term care insurance. Transfers part of the risk in exchange for premiums, which may be subject to increase. Underwriting matters and generally becomes harder with age and health changes.
• Hybrid life or annuity contracts with care benefits. Combine a care benefit with another feature. Contract terms, benefit triggers, and costs vary considerably and should be read against the actual policy documents.
• Family caregiving. Common and frequently uncosted, with real financial and personal consequences for the caregiver that belong in the conversation.
• Medi-Cal. Subject to eligibility requirements, look-back rules, and estate recovery. An attorney question.

Timing matters across all of these. Options generally narrow as health changes and as any applicable look-back window comes into play, which is the case for having the conversation earlier rather than at the point of need.

Common mistakes

• Assuming Medicare covers custodial care. It generally does not.
• Assuming a revocable living trust protects assets from care costs. It generally does not.
• Assuming a trust is funded because it was signed. Funding is separate work.
• Attempting to retitle a retirement account into a trust without advice, which may create significant tax consequences.
• Leaving estate documents and beneficiary designations unreviewed after a divorce, a death, or a move.
• Waiting until care is needed, at which point both the coverage options and the planning options have narrowed.

How Avinci contributes

Avinci Wealth Management is a Registered Investment Adviser registered in California, Arizona, Illinois, Texas, and Nevada, firm CRD #327780, with its headquarters at 23929 Valencia Blvd, Suite 404 in Santa Clarita and additional offices in Beverly Hills and Woodland Hills. We do not practice law, we do not draft trusts, and we do not determine Medi-Cal eligibility.

What we contribute is the financial modeling and the coordination. Under the Retirement Blueprint, a long-term care scenario can be projected against the income plan year by year, so the cost is visible alongside the withdrawal sequence and the tax position rather than considered in isolation. At the client's direction, Avinci may provide administrative assistance with account paperwork and help track account titling and beneficiary-designation information. Legal determinations regarding trusts, ownership, titling, and program eligibility are referred to the client's attorney.

Insurance and annuity products, including contracts with long-term care features, are offered through our affiliate, Lucas Insurance Services, which may receive commissions from issuing insurance companies. This compensation arrangement creates a conflict of interest and is disclosed in our Form ADV. Related reading: trust funding and titling in California and how insurance and annuities are handled here.