What happens to the house?

While they're alive: often exempt

A primary home is frequently an exempt asset — it usually doesn't have to be sold to qualify for Medicaid — especially when a spouse, a minor, or a disabled child still lives there, or when the person has a genuine intent to return home. There is generally a home-equity limit above which this protection doesn't apply, and that limit is set within federal bounds and varies by state.

After death: estate recovery

Here is the part that surprises almost everyone. After a person who received long-term-care Medicaid dies, federal law requires the state to try to recover what it spent on their care — from their estate. For most families, the home is the main thing in that estate. So a home that was exempt while your parent was alive is not automatically safe to pass on afterward. States must pursue this for people who received long-term care at age 55 or older; how far a state reaches (only the probate estate, or more) and how hard it pushes vary a great deal.

This is the single most misunderstood fact in elder care, and the one families most often wish they had known sooner. Source: Medicaid.gov — Estate Recovery.

What's protected — the exceptions that matter

It is not a blanket "the state takes the house." Federal law shields the home in several important situations. Generally, the state cannot recover — or must delay recovery — when:

• a surviving spouse is alive — recovery is deferred entirely for as long as they live;
• a child under 21, or a blind or disabled child of any age, survives;
• the caregiver-child exception applies — an adult child who lived in the home for at least two years before the parent moved into care, stayed there since, and provided care that helped delay that move, may keep the home;
• a sibling with an ownership interest lived in the home for at least a year before the move;
• recovery would cause undue hardship — heirs can ask the state to waive it; federal guidance points especially to modest homes and income-producing property like a family farm or business.

Source: Medicaid.gov — Estate Recovery. Which of these apply, and how your state administers them, is exactly what an elder-law attorney sorts out.

Why this is worth facing early

Here is the reason to learn this now rather than in a crisis. The legitimate ways to protect a home — the kinds of trusts or transfers an elder-law attorney might use — take time to work, because of the five-year look-back. Moves made in a hurry, right before applying, usually backfire. Families who understand this early often have real, legal options; families who learn it in an emergency frequently have none left.

We can't tell you what to do with your home — that is your decision, and your attorney's. What this page is for is making sure the question is in front of you while there is still time to answer it well. If a home is part of your family's picture, this is a conversation to have with an elder-law attorney sooner rather than later.

Where the public record stops — and who to ask

Is your home safe, and what will estate recovery look like in your state? That answer depends on your state and your situation, and it belongs to the people who decide it — not to us. Here is who has it, and exactly what to ask so you arrive prepared instead of lost.

Who to ask: an elder-law attorney (this is squarely their expertise); your state Medicaid office for its estate-recovery policy.

What to ask them:

• Is our home exempt in my state, and what is the home-equity limit?
• How aggressive is my state's estate recovery, and what does it try to recover?
• What undue-hardship protections exist for heirs, and how do we ask for them?
• Are there legitimate ways to protect the home given our timeline?

You now know more than most people who walk into that office. That is the whole point of this page.

Where to go next

• Protecting the spouse at home
• The five-year look-back
• Who helps me locally