Can Medicaid Take Your House for Nursing Home Care?

Medicaid generally cannot take your house for nursing home care while you are alive, but after you die the state is required to try to recover what it spent on your care, and your home is usually the largest asset it can reach. Your primary residence is an exempt asset when you apply, so you don’t have to sell it to qualify. The exposure comes later, through estate recovery, and what you do before and during the application decides how much of that exposure your family actually carries.

Why Your Home Doesn’t Disqualify You From Medicaid

When you apply for Medicaid long-term care coverage, the program counts your financial resources. In most states, an individual can hold no more than $2,000 in countable assets.¹ Your primary home is typically excluded from that count as long as your equity in it falls within a federally set ceiling. For 2026, that ceiling is either $752,000 or $1,130,000, depending on which figure your state uses. Equity means the home’s current market value minus any mortgage or other debt against it.

If your equity exceeds the limit your state applies, you will not qualify for nursing home coverage until you reduce it, usually by taking out a home equity loan or selling the property. The equity cap does not apply at all when a spouse, a child under 21, or a blind or disabled child of any age lives in the home.²

The Intent-to-Return Rule

Your home stays exempt only as long as you intend to return to it. Most states accept a signed statement or affidavit expressing that intent, even when a return is medically unlikely. Some states have their own form. If you cannot sign yourself, a spouse or family member can usually sign on your behalf. Skip this step and the home can lose its exempt status, which means its full equity counts against you. Nobody mentions this until an application is already in trouble, so handle it at the start.

If a Spouse Still Lives in the Home

The home is fully exempt from the asset count, with no equity cap, as long as the community spouse (the one not in the nursing home) lives there.² Federal spousal impoverishment rules also prevent Medicaid from stripping the community spouse of income and other assets, though those protections sit alongside the home rather than shielding it directly.³ Estate recovery cannot begin while the surviving spouse is alive either, so the home is protected on both ends of the process as long as the spouse remains.

Liens While You Are in the Nursing Home

Medicaid usually cannot place a lien on your property while you are alive. There is one significant exception. If you are a nursing home resident and the state determines you cannot reasonably be expected to return home, the state can place a lien on your real property for the amount of Medicaid benefits it has paid on your behalf.² The lien does not force a sale. It secures the state’s claim so that if the home is sold during your lifetime, the state gets paid from the proceeds.

The state cannot place this lien if any of these people lawfully live in the home: your spouse, your child under 21, your child of any age who is blind or permanently disabled, or a sibling who has an equity interest in the home and lived there for at least a year before you entered the facility.² If your condition improves and you go home, the lien must come off.⁴

Estate Recovery After You Die

The Medicaid Estate Recovery Program is where the real financial risk to your home lives. Federal law requires every state to seek reimbursement from the estates of recipients who were 55 or older when they received benefits. At a minimum, states must recover costs for nursing facility services, home and community-based services, and related hospital and prescription drug costs.⁴ Some states go further and pursue recovery for all Medicaid-paid services.

The claim is capped at what Medicaid actually paid. If the program spent $150,000 on your care and your estate is worth $300,000, the state can only take $150,000. Recovery starts after you die, and the state files against the estate the way any other creditor would.⁵

Probate-Only States vs. Expanded-Recovery States

This is where state law matters more than federal law. Every state must, at minimum, recover from the probate estate, meaning property that passes under a will or through intestacy.⁵ Federal law also lets states adopt an expanded definition of “estate” that reaches assets passing outside probate: joint tenancy, tenancy in common, life estates, living trusts, and survivorship arrangements.²

Roughly half of states use the probate-only definition; the other half have gone with expanded recovery. In a probate-only state, moving the home into a living trust or holding it in joint tenancy with right of survivorship may keep it out of the state’s reach because those assets skip probate. In an expanded-recovery state, those same moves offer little or no protection. Which definition your state uses is the single most important fact for planning, because it determines which protective strategies actually work.

Who the State Cannot Recover From

Federal law blocks estate recovery in these situations:⁴

There is a surviving spouse. Recovery has to wait until that spouse also dies.
There is a surviving child under 21.
There is a surviving child of any age who is blind or permanently disabled.

Two more exemptions protect the home in the eligibility and transfer context, and some states carry them into estate recovery as well:

A caregiver child, meaning an adult child who lived in the home for at least two years before the parent entered a nursing facility and provided care that delayed institutional placement.²
A sibling who has an equity interest in the home and lived there for at least one year before the recipient entered a facility.²

Hardship Waivers

Every state is required to waive estate recovery when enforcing it would cause undue hardship.² The federal statute leaves the specific criteria to each state, so what counts varies. Waivers commonly go to an heir who lives in the home as a primary residence and owns no other property, to an estate made up mainly of a family farm or small business that is the heir’s sole source of income, or to situations where recovery would leave an heir unable to afford basic necessities.

One thing is consistent: losing an expected inheritance is not hardship. Waivers exist for real economic distress, not to preserve wealth transfers. You typically have to request the waiver in writing within a set window after receiving the state’s recovery notice. Miss the deadline and you can lose the right to claim it.

Why You Can’t Just Give the House to Your Kids

Transferring your home for less than fair market value shortly before applying triggers a penalty. Medicaid reviews all asset transfers made during the 60 months before your application.² Gifts or below-market sales in that window produce a penalty period during which you cannot get Medicaid coverage.

The penalty is calculated by dividing the uncompensated value of what you transferred by the average monthly cost of nursing home care in your state.² States cannot round down fractional months. And the penalty clock does not start on the transfer date. It begins on the later of the transfer date or the date you enter a nursing home and would otherwise qualify.⁶ That timing rule is what makes late transfers dangerous: give the house away and end up in a facility three years later, and the penalty starts running only after you’re already there and otherwise eligible, leaving you with no coverage.

Federal law does carve out home transfers Medicaid cannot penalize, even inside the five years:

A transfer to your spouse, at any time.
A transfer to a child of any age who is blind or permanently disabled.
A transfer to a sibling who already has an equity interest in the property and lived there for at least a year immediately before you entered a nursing facility.
A transfer to an adult child who lived with you for at least two years immediately before your institutionalization and provided care that let you stay home longer than you otherwise could have.²

The caregiver child exemption sounds simple and rarely is. The state decides whether the child’s care actually delayed the nursing home, and most states want documentation such as a physician’s statement. Living in the home and helping out is usually not enough.

Strategies That Can Protect the Home

Every strategy worth using requires acting well before you apply, because of the five-year look-back.

Irrevocable trust. Moving the home into an irrevocable trust removes it from your countable assets and, in probate-only states, keeps it out of estate recovery. The transfer must happen at least five years before your application to avoid a penalty. You lose control of the home once it’s in the trust, so this is not a light decision.
Spousal transfer. Transferring the home to a healthy spouse is penalty-free and protects it during your lifetime. The exposure shifts to the surviving spouse’s estate after both of you have died, so more planning may be needed.
Exempt transfers to qualifying family members. Transfers to a blind or disabled child, a caregiver child who meets the two-year residency requirement, or a sibling with equity who meets the one-year residency requirement are all penalty-free under federal law.²
Life estate deed. A life estate lets you keep the right to live in the home while transferring the remainder interest to someone else. When you die, the property passes directly to the remainder holder outside probate. In probate-only states, that can defeat estate recovery. In expanded-recovery states, the state may still reach it. Creating a life estate is also subject to the look-back, and Medicaid will treat the value of the transferred remainder interest as an uncompensated transfer if it happens within five years of application.

An elder law attorney who knows your state’s specific rules is worth consulting before trying any of this. Medicaid planning done wrong produces a penalty period with no coverage, which is worse than doing nothing. Your state’s choice on expanded estate recovery, its hardship waiver criteria, and its reading of the caregiver exemption all shape which approach makes sense.

1
Medicaid.gov. January 2026 SSI and Spousal Impoverishment Standards
2
Office of the Law Revision Counsel. 42 USC 1396p – Liens, Adjustments and Recoveries, and Transfers of Assets
3
Office of the Law Revision Counsel. 42 USC 1396r-5 – Treatment of Income and Resources for Certain Institutionalized Spouses
4
Medicaid.gov. Estate Recovery
5
U.S. Department of Health and Human Services. Medicaid Estate Recovery
6
Centers for Medicare and Medicaid Services. Transfer of Assets in the Medicaid Program