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A special needs trust lets you set aside money for a disabled child or family member without disqualifying them from SSI or Medi-Cal, the two benefits most people with disabilities rely on for income and healthcare. The trust holds the assets; your relative still qualifies for public benefits because the money isn’t counted as theirs. That basic structure hasn’t changed. What has changed, as of January 1, 2026, are three of the rules surrounding it, and a fourth rule that was set to expire but didn’t. If you already have a trust in place, or you’re weighing whether you need one, these aren’t background noise. Each one changes a real decision you’ll have to make.
For two years, California removed asset limits from most Medi-Cal programs. That changed on January 1, 2026. The Department of Health Care Services confirms the limit returned to 2022 levels: $130,000 for an individual, plus $65,000 for each additional household member.
The part that causes the most confusion is the look-back period that comes with it. If your relative moves into a skilled nursing facility, DHCS can now review asset transfers made in the 30 months before admission. But that look-back only applies to nursing facility care. If your child or family member lives at home or in a group home and receives Medi-Cal through SSI or a waiver, this change doesn’t touch them. Community-based Medi-Cal, which covers most people using a special needs trust, isn’t part of the asset-limit reinstatement.
This is exactly the kind of distinction that’s easy to miss in a headline and expensive to get wrong. If your trust was funded assuming no asset limit at all, it’s worth confirming your relative’s specific Medi-Cal category before assuming anything changed for them.
Does the asset limit affect a special needs trust directly? No. Assets held in a properly drafted special needs trust were never counted toward your relative’s own resource limit in the first place, before or after this reinstatement. What the reinstated limit affects is money held outside the trust, in your relative’s own name or accounts, if they’re applying for nursing-facility-level Medi-Cal.
Until this year, you could only open an ABLE account if your disability began before age 26. The Senate Special Committee on Aging’s summary of the ABLE Age Adjustment Act confirms that as of January 1, 2026, the cutoff moved to age 46. If your relative developed a qualifying disability at 30, 38, or 44, they may be ABLE-eligible for the first time.
That matters alongside a special needs trust, not instead of one. An ABLE account holds up to $19,000 in annual contributions tax-free for qualified disability expenses, but a trust can hold far more and cover a broader range of long-term needs. Families increasingly use both: the trust for larger assets and long-term planning, the ABLE account for day-to-day spending flexibility without jeopardizing SSI or Medi-Cal.
Curious whether this newly-eligible group includes someone in your family, or whether your current trust and an ABLE account should be working together? That’s a conversation worth having before you assume your existing plan already accounts for it. Schedule a consultation with Salvo Law and we’ll walk through your specific situation.
Every state runs its own ABLE program, and they’re not identical. California’s CalABLE has one feature that consistently surprises people: under SB 218, CalABLE confirms there is no Medi-Cal payback on a CalABLE account after the beneficiary’s death. In most other states, Medicaid can file a claim against remaining ABLE funds when the account holder dies. California opted out of that provision entirely. If your family has been hesitant to open an ABLE account because you’d heard the state can claw back the balance later, that fear doesn’t apply to CalABLE specifically, and it’s one more reason CalABLE is worth pairing with a California special needs trust rather than treating the two as competing options.
If you started a 529 college savings account for a child who later needed a special needs trust instead, you’ve likely looked into rolling those funds into an ABLE account. That option was set to expire at the end of 2025. It didn’t. Section 110017 of H.R. 1, the budget reconciliation act signed into law in 2025, made the 529-to-ABLE rollover permanent starting in 2026. The rollover still counts toward the ABLE account’s annual contribution limit, and the IRS lays out the mechanics in Publication 907, but families no longer need to rush a rollover before a sunset date that no longer exists.
None of these four changes require you to redo your estate plan from scratch. What they do require is checking your specific facts against them: which Medi-Cal category your relative falls under, whether a newly-eligible family member should open an ABLE account, whether your trust and an ABLE account are coordinated instead of working against each other. A plan built in 2019 or 2022 was built for a different set of rules than the ones now in effect.
A few concrete steps worth taking this year: pull your relative’s most recent Medi-Cal notice and confirm which program they’re enrolled under, since that determines whether the asset limit touches them at all. If your family member’s disability began between ages 26 and 46, ask whether opening a CalABLE account alongside the existing trust makes sense now that they qualify. And if a 529 plan has been sitting unused because a rollover deadline once made the timing feel urgent, that pressure is gone. You can plan the rollover on your own schedule instead of a legislative one.
If it’s been a few years since your special needs trust was reviewed, or you’ve never had one and aren’t sure where to start, reach out to Salvo Law at 818-676-9572. We’ll look at what’s actually changed for your family, not just what changed in the law.