Non-Countable Assets for Medicaid: Home, Vehicle, and Trusts

Non-countable assets for Medicaid are the things you can keep and still qualify for long-term care coverage. Most states cap countable assets at $2,000 for a single applicant, so what falls outside that count is what actually determines whether you’re eligible. The exempt list is broader than most people assume: your home, one car, household goods, certain life insurance, a burial fund, some trusts, ABLE accounts, and a protected share of assets for a spouse who stays home all sit outside the calculation.

Your Home

Your primary residence is usually the most valuable asset Medicaid will ignore. It stays non-countable as long as you, your spouse, or a dependent child lives there. If you’ve moved into a nursing facility, the home remains exempt as long as you express an intent to return, whether or not returning is medically realistic.¹

There is a ceiling on how much equity qualifies. Federal law lets each state pick a home equity limit, and for 2026 the inflation-adjusted range runs from $752,000 to $1,130,000 depending on which limit your state adopted.²³ If your equity is above the state’s threshold, you won’t qualify for nursing facility coverage until it drops below, unless your spouse or a minor, blind, or disabled child lives in the home.

One boundary worth noting: the home exemption protects you during your lifetime. After death, states are required to seek repayment of long-term care costs from the estates of recipients who were 55 or older when they received benefits, and the home is the asset most commonly targeted.³ Recovery is blocked while a surviving spouse is alive or when a surviving child is under 21, blind, or permanently disabled.⁴

One Vehicle and Personal Belongings

One automobile is excluded from countable resources, regardless of its value, as long as it’s used for transportation by you or a member of your household.⁵ A second vehicle counts against you at your equity in it. Some states carve out additional exceptions for vehicles modified for a person with a disability or used for medical transportation.

Household goods and personal belongings are also non-countable. Furniture, clothing, appliances, jewelry, and similar items you keep at home aren’t treated as available financial resources. Medicaid looks at what you could readily convert to cash to pay for care, and everyday personal property doesn’t fit that description.

Life Insurance and Burial Funds

Whether life insurance counts turns on cash value. Term life has none and never counts. Whole life and universal life policies build cash value, and here the rule is specific: if the combined face value of all your cash-value policies on any one person is $1,500 or less, the cash surrender value is fully excluded. Once the total face value crosses $1,500, the entire cash surrender value becomes a countable resource.⁶ The threshold uses face value, not the cash you could actually pull out, which trips up many applicants.

You can also set aside up to $1,500 in a designated burial fund without it counting, as long as it’s clearly earmarked and kept separate from your other accounts.⁷ Irrevocable prepaid funeral contracts are non-countable too, because once locked in, the money is no longer available to you for anything else. Many states allow considerably more than $1,500 in irrevocable funeral arrangements, which is why prepaid funerals are a common planning tool.

Retirement Accounts

IRAs and 401(k)s sit in a gray area. There is no single federal rule, and each state sets its own policy. Some states treat a retirement account as non-countable if it is in payout status, meaning you’re taking required minimum distributions or periodic payments; in those states the balance is excluded, but each distribution counts as income. Other states count the full balance whether or not you’re taking distributions. A smaller number exempt retirement accounts entirely. Your state’s specific rule is one of the first things to verify before you plan around one of these accounts.

For married couples, both spouses’ retirement accounts are considered jointly owned when Medicaid assesses eligibility, just like every other asset.⁸

Assets Protected for a Spouse at Home

When one spouse enters a nursing facility and applies for Medicaid, federal spousal impoverishment rules protect a share of the couple’s combined assets for the spouse who stays home. This share is the Community Spouse Resource Allowance, or CSRA. For 2026, the federal minimum is $32,532 and the maximum is $162,660.⁹²

The CSRA is calculated from all assets the couple owns on the day the applicant enters the facility, regardless of whose name is on any account or title. States choose where to set their allowance within the federal range, and some use a formula that gives the community spouse half of the couple’s combined assets up to the maximum. Anything above the CSRA and above the applicant’s own $2,000 limit must generally be spent down before the institutionalized spouse qualifies. The CSRA itself is treated as non-countable for the applicant’s eligibility determination.

Trusts That Don’t Count

Special Needs Trusts

A special needs trust holds assets for a person with a disability without making those assets countable for Medicaid. Federal law exempts these trusts if the beneficiary is under 65 and disabled, and the trust was established by the individual, a parent, grandparent, legal guardian, or a court.¹⁰ When the beneficiary dies, the state must be repaid for all Medicaid benefits it provided, up to what remains in the trust. Funds can pay for things Medicaid doesn’t cover, such as personal care items, transportation, education, and recreation, but the trust cannot hand cash directly to the beneficiary.

Pooled Trusts

Pooled trusts follow a similar principle but are managed by nonprofit organizations that combine the funds of many beneficiaries into a single investment pool while keeping separate sub-accounts. The key difference is that pooled trusts are available to individuals with disabilities of any age, including those over 65.¹⁰ Remaining funds at the beneficiary’s death either stay in the pool to benefit other members or reimburse the state.

Qualified Income Trusts (Miller Trusts)

About half of states are “income cap” states, where you’re disqualified from Medicaid long-term care if your income exceeds a set threshold, even by a dollar. A qualified income trust, commonly called a Miller trust, addresses this. You deposit your monthly income into the trust so it isn’t counted for eligibility that month.¹⁰ Miss a deposit or deposit too little in any given month and you lose Medicaid coverage for long-term care services that month. The trust must be irrevocable and can hold only income, not other assets.

ABLE Accounts

ABLE (Achieving a Better Life Experience) accounts let individuals who became disabled before age 26 save money without jeopardizing Medicaid. Federal law directs that ABLE balances, contributions, and distributions for qualified disability expenses are disregarded when determining eligibility for means-tested federal programs, including Medicaid.¹¹

For SSI, the first $100,000 in an ABLE account is excluded from resources. Above $100,000, SSI benefits are suspended rather than terminated, and Medicaid coverage continues during that suspension.¹¹ Few savings vehicles let you accumulate past the usual resource limit without losing healthcare coverage.

Property You Use to Earn a Living

Property used in a trade or business is excluded regardless of value. That covers tools, equipment, inventory, commercial real estate you actively use, and even a government license or permit that lets you earn income.¹²

Nonbusiness property is treated more narrowly. Property used to produce goods or services essential to daily activities, such as land you farm for your household’s food, is excluded up to $6,000 in equity. Other income-producing nonbusiness property can also be excluded up to $6,000 in equity, but only if it generates an annual return of at least 6% on the excluded portion.¹² The property must be in current use or reasonably expected to return to use. Cash sitting in a bank account doesn’t qualify unless it’s actively used as part of a business.

Giving Assets Away Doesn’t Make Them Exempt

Non-countable assets stay non-countable only if you haven’t given assets away to manufacture eligibility. When you apply for Medicaid long-term care, the state reviews every asset transfer you made during the 60 months before your application date. Any transfer for less than fair market value in that window triggers a penalty period when Medicaid won’t pay for nursing facility or waiver services.¹⁰

The penalty isn’t a flat five years. It’s the total uncompensated value transferred divided by the average daily cost of nursing home care in your state, and multiple transfers within the window are added together first. Certain transfers are exempt: to a spouse, to a child under 21, to a blind or disabled child, to a sibling with an existing equity interest who was living in the home, and to a special needs trust for a disabled individual. Everything else risks a coverage gap that starts running only when you would otherwise be eligible, which is precisely when you need care.

1
Office of the Assistant Secretary for Planning and Evaluation (ASPE). Medicaid Treatment of the Home: Determining Eligibility and Repayment for Long-Term Care
2
Centers for Medicare & Medicaid Services. 2026 SSI and Spousal Impoverishment Standards
3
Office of the Law Revision Counsel. 42 U.S. Code 1396p – Liens, Adjustments and Recoveries, and Transfers of Assets
4
U.S. Department of Health and Human Services (ASPE). Medicaid Estate Recovery
5
Social Security Administration. Code of Federal Regulations 416.1218 – Exclusion of the Automobile
6
Social Security Administration. SSA Handbook 2159
7
Social Security Administration. POMS SI 01130.425 – Life Insurance Funded Burial Contracts
8
Department of Health & Human Services (ASPE). Medicaid and Spouses of Long-Term Care Recipients
9
Medicaid.gov. Spousal Impoverishment
10
Office of the Law Revision Counsel. 42 USC 1396p – Liens, Adjustments and Recoveries, and Transfers of Assets
11
Office of the Law Revision Counsel. 26 U.S. Code 529A – Qualified ABLE Programs
12
Social Security Administration. Property Essential to Self-Support – Overview