How To Avoid Nursing Home Taking Your House- Simple Yet Effective Ways In 2024

To protect your nursing home from taking your house you can form a life estate, put it in an irrevocable trust, purchase long-term care insurance or use a Medicaid asset protection trust, or transfer all your assets before.

However, the process is not as easy as it sounds. So, reading this post can surely help.

Let’s start by finding out can nursing home take your house

In This Post

Can Nursing Home Take your House?

No, in general, a nursing home cannot simply take your house. However, in some circumstances, a nursing home might be able to make a claim on your house or assets.

According to 2022 reports,

Around 5% of US senior citizens need to join a nursing home at an older age.
-Statista

So, when planning your retirement you should think about nursing homes too. But nursing homes are pretty expensive. They can cost around $250-$300 per day!

Yes, there is Medicaid but not everyone is eligible for them. As a result, you have to pay for these nursing homes from your savings. When these savings dry up and you are unable to pay for your care, the nursing home may seek payment through various means including taking your house.

Nursing homes may also seek help from Medicaid for their costs. In some cases, Medicaid can also place a lien on your home to recover the cost of your care. So, it’s a possibility that nursing homes might be able to take your house.

Now let’s have a look at What happens to assets if you go into a nursing home?

What Happens To Your Home If You Go Into A Nursing Home?

Actually, it depends on a variety of factors including your health condition, marital status, the terms of your will or living trust, your state law, if there is any primary resident or not, and if you are using Medicaid or not.

So here are some instances of what can happen to o your home after you go to a nursing home

If you are married and your spouse is still living in the home, the home will likely become the spouse’s property.

When your health condition gets better and you can leave the nursing home then your house will be yours again.
If you have children, they may also have a right to the home.
In case you have a will or living trust, you may be able to leave your home to your children or a loved one.

In the event of not having anyone who can take care of your home or money to pay the nursing home costs then it may be sold to pay for your nursing home costs.

When your home is sold, the money from the sale will be used to pay for your nursing home costs.
In case you are eligible for Medicaid then any primary resident can live in your house. If you return home then there is no issue or claim.

However, if you die in a nursing home while using Medicaid and the house is in your name then the state will sell the house to recover the amount paid for your medical expenses.

In case your house is sold for any of the above cases then any money that’s left over will be given to you or your family.

These are some events that can happen to your house when you go into a nursing home. However, these are some common situations. But the situation can be unique for every person, and what can happen will also vary.

As you can see there is a high chance that the nursing home or Medicaid will take your house. But how to avoid it?

Let’s find out

How To Avoid Nursing Home Taking Your House

To avoid a nursing home from taking your house you need to start the preparation long before you go to the nursing home. Otherwise, there lies a chance of a nursing home taking your house.

Here is how to avoid nursing home taking your house

Form A Life Estate

Forming a life Estate can save your house from nursing homes. Because when you form a life estate, it ensures that the owner/ life tenant owns the immovable property until they pass away. After that, the person you share your property with or the next deed in the life state will own your property.

As a result, the nursing home can not take your house under any circumstances. However, if you are eligible for Medicaid then you need to form the Life Estate at least five years before going into a nursing home. Otherwise, you might lose your Medicaid eligibility.

Please contact an expert lawyer for forming a life estate

Put Your House In An Irrevocable Trust

Putting your house in an Irrevocable Trust can also help you avoid nursing homes taking your house. However, once you sign it, you can not cancel the trust. Moreover, if you put your house in an irrevocable Trust, the house will no longer be your asset. You have to appoint an independent trustee.

So, nursing homes can not take your house if you put it in an irrevocable trust. But for Medicaid, you need to put your house in an irrevocable trust at least 5 years before.

Before making any decision on irrevocable trust, please consult with an expert lawyer.

Purchase A Long-Term Care Insurance

Long-Term Care Insurance can be another effective solution to avoid nursing home taking your house. Because it pays for adult daycares, nursing homes, and home health care for patients diagnosed with chronic conditions and illnesses.

However, long-term care insurance is pretty expensive nowadays. Moreover, if you don’t need a nursing home at an older age then all the money you invested in it will go to waste. So, consult with your financial advisor before purchasing long-term care insurance.

Use Medicaid Asset Protection Trust

Medicaid Asset Protection Trust is a way for being eligible for Medicaid and avoid nursing home taking your house at the same time. This trust will make sure your assets do not exceed the Medicaid eligibility limit. Moreover, as your house is in a trust so nursing homes can not take your house.

However, in a Medicaid asset protection trust, you will lose some control over your house. Moreover, some states have different laws regarding Medicaid asset protection trust. As a result, your house can be subject to seizure in certain states.

So, before making any decision, please consult with an expert lawyer.

Transfer Your House 60 Months Before

Another effective way to save your house from nursing homes is to transfer it. But you need to transfer it at least 60 months before going into any nursing home. Otherwise, you might not be eligible for Medicaid.

However, this rule has some exemptions. You will still be eligible for Medicaid if you transfer your house to

Your Spouse
Children under the age of 21.
Blind or disabled children

A sibling who has equity in the house and already living in it for a year
A caretaker child.

The law or policy regarding this might vary from state to state.

This method is quite effective. But it’s not possible to determine when you will need a nursing home. As a result, make a will before or consult with a senior law expert.

These are some of the effective methods how to avoid nursing home taking your house.

Now, if you are a child who wants to save your parent’s property from a nursing home, then what to do?

Let’s find out.

How To Protect Parents’ Assets From Nursing Home

Here is how to protect your parents’ assets from nursing home

Avoid nursing homes if it’s not necessary. Instead, take care of your sick parents yourself.

Be a caretaker child until your parents must have to admit to a nursing facility.
Make your parents informed about the policies and laws regarding nursing homes taking their house.
If it’s possible then gift or influence your parents for purchasing long-term care insurance.

Consult a senior law expert with your parents to save their assets.

These are some ways to protect your parents’ assets from nursing homes. But what if you are a spouse and need to sell the house?

Can You Sell Your House If Your Spouse Is In A Nursing Home?

The quick answer is yes, you can sell your house even if your spouse is in a nursing home. However, there are a few things you should consider before putting your house on the market.

Firstly, if your spouse is eligible for Medicaid and he/she has equity in the house then your spouse has to abandon the equity in the house. Otherwise, you need to pay back the state an equal amount of your spouse’s nursing home costs provided by Medicaid.
Secondly, if your spouse is in a nursing home, you will likely need to get their permission to sell the house. In most cases, the nursing home will have a form you can fill out to give them the authority to act on your spouse’s behalf.
Another thing to consider is how the sale of the house will impact your spouse’s Medicaid eligibility. If the sale of the house will result in the value of your spouse’s assets being higher than the Medicaid eligibility limit, they may lose their eligibility for Medicaid.

However, different states have different limits regarding Medicaid eligibility. So, know the Medicaid eligibility of your state and calculate if that can hurt your spouse’s ability or not then sell the house.

As different states have different laws, you should talk to an expert who can help you understand the laws regarding this in your state.

Moreover, when you are considering selling your house, it is important to speak with an attorney who can help you navigate these complicated issues.

Can I Sell my Mom’s House if She is in a Nursing Home?

It depends on whether you have legal authority over the house and if your mother is mentally competent or not.

In case your mother is mentally competent and granted you the legal authority to act on her behalf, then you will be able to sell your mother’s house. However, if your mother is mentally competent but has not granted you legal authority to act on her behalf, you would need her signed consent form before selling the house.

On the other hand, if your mother is not mentally competent, then you would need to be the court-appointed durable power of attorney to sell the house.

Moreover, if Medicaid or the nursing home has liens on the property, you may need to use the proceeds from the sale to satisfy the lien before you can distribute funds.

It’s better to talk to an attorney before you decide to sell the house on your mother’s behalf.

Now we know about saving your house from nursing homes. However, can a nursing home take your pension?

Can A Nursing Home Take Your Pension?

In general, a nursing home can not take your pension in the US. However, the answer to this question is a bit more complicated than that. There are some exceptions to this rule.

For example, if you owe a large sum to the nursing home, then they might be able to take your pension to cover the costs.

Moreover, if you are receiving Medicaid, the nursing home may be able to take a portion of your pension to pay for your care. Because pension is considered countable income for Medicaid purposes.

Lastly, in case you have any legal agreement with the nursing home that allows them to take your pension, they may be able to do so.

If you want to find out whether getting fired can harm your pension or not then check out our article on fired before retirement.

What Happens to your Social Security if you go to a Nursing Home?

When you go to a nursing home, your Social Security benefits will generally continue to be paid. However, depending on your situation the amount might get reduced.

For instance, if you are receiving need-based Supplemental Security Income (SSI), your benefits may be reduced or suspended if you move to a nursing home.

On the other hand, if you are using Medicaid to pay for your nursing home costs, most of your Social Security benefits may be used to help pay for your nursing home care. So, you will receive less payment. This is because Medicaid requires you to contribute a portion of your income towards the cost of your care.

In Summary

You should form a life estate, put your house in an irrevocable trust, or use a Medicaid asset protection trust to protect your house from nursing homes.

But as it’s a complicated issue and the stakes are too high. So, I strongly recommend you consult with a lawyer, find out your state law and talk to your financial advisor before making any decisions.