Key Probate Law and Related Policy Changes Effective January 1, 2026
As 2026 approaches, several statutory and regulatory changes will impact probate practice in California. Amendments to Probate Code § 9202 introduce new notice requirements, Medi-Cal eligibility rules are shifting with the reinstatement of the asset test, and federal estate tax exemptions will increase under new federal legislation. The following provides an overview of developments applicable in the year ahead.
I. Amendments to Probate Code § 9202
Assembly Bill 1521 modifies Probate Code § 9202 by expanding notice obligations owed by personal representatives and estate counsel. These changes apply to estates in which Letters are first issued on or after January 1, 2026.
A. Electronic Notice to the Department of Health Care Services
The statute now expressly allows notice to the Director of the Department of Health Care Services (DHCS) to be submitted electronically through the department’s website. Traditional mailing procedures remain available.
B. New Notice Requirement to the Department of Child Support Services
A new subdivision, Probate Code § 9202(e), establishes a mandatory notice requirement for estates in which the decedent may have had child support obligations.
Under Probate Code § 9202(e)(1), within 90 days after Letters are issued, the personal representative or estate counsel must provide notice of the decedent’s death to the Director of the California Department of Child Support Services (DCSS) if the representative or attorney knows, or has reason to believe, that the decedent had an outstanding child support obligation under a valid court order. Notice may be provided by mail under Probate Code § 1215 or electronically through the DCSS website.
Once DCSS receives notice, the local child support agency has four months to assert a creditor’s claim against the estate under Probate Code § 9202(e)(2), similar to other creditor claims.
II. Medi-Cal Eligibility Changes: Asset Test Reinstated
California will reinstate the Medi-Cal asset test for many non-MAGI programs, including long-term-care and aged/disabled categories, effective January 1, 2026. Non-MAGI programs refer to Medi-Cal eligibility categories that do not use the Modified Adjusted Gross Income (MAGI) methodology. They generally include long-term-care, aged, blind, or disabled beneficiaries, in contrast to programs for children, pregnant individuals, or parents where MAGI rules apply. This represents a shift from the recent period during which asset limits rules were removed.
Beginning in 2026, Medi-Cal will again evaluate an individual’s assets when determining eligibility. The reinstated thresholds are $130,000 for an individual and $195,000 for a married couple. Additional allowances may be available for larger households.
Transfers for less than fair market value will once again trigger penalty periods for long-term-care eligibility determinations.
Trust structures, such as irrevocable trusts or Medi-Cal asset protection trusts, may require review to ensure they comply with Medi-Cal’s definitions and requirements after 2026. California’s estate-recovery rules remain unchanged, and assets held in living trusts, joint tenancy, or via transfer-on-death instruments continue to avoid Medi-Cal recovery.
III. Federal Estate Tax Changes: Increased Exemptions Under the One Big Beautiful Bill Act (OBBBA)
Federal legislation has modified the federal estate and gift tax system. Effective January 1, 2026, the federal estate and gift tax exemption increases to $15 million per individual and $30 million per married couple, with no sunset provision. Beginning in 2027, the exemptions will be indexed for inflation. The generation-skipping transfer (GST) tax exemption also increases to $15 million.
The ability to transfer unused exemption to a surviving spouse (portability) remains available. However, an estate tax return must still be filed to elect portability, even for estates below the filing threshold.
The top federal estate tax rate remains at 40% for amounts exceeding the applicable exemption. We’re up-to-date on the latest Probate Law and stand ready to help. If you need Probate assistance, Holborn Law is here for you.