Medicaid and the Family Home

Three separate questions, one asset

Families researching Medicaid and the home are usually really asking three different questions at once: is the home protected while my parent is alive, could the state put a claim on it while they're alive, and what happens to it after they die. Each has a distinct answer.

Question 1: Is the home exempt during the applicant's life?

Generally, yes. A primary home is excluded from Medicaid's countable asset limit as long as the applicant's spouse, a child under 21, or a child of any age who is blind or permanently disabled lives there — that exemption is automatic. If none of those relatives live there, the applicant must have a state-specific home equity interest under the limit (a 2026 minimum of $752,000, maximum of $1,130,000, per state election) and must state an Intent to Return home. Full detail on this rule is on our page, Can I Keep My House If I Go Into a Nursing Home? Source: American Council on Aging — home exemption rules.

Question 2: Can the state put a claim on the home while the recipient is alive?

Yes, in a specific circumstance. States may impose a TEFRA lien on the real property of a Medicaid recipient who is "permanently institutionalized" in a nursing facility — but not if a spouse, a child under 21, a blind or disabled child of any age, or a sibling with an equity interest in the home is living there. If the recipient is later discharged and returns home, the state must remove the lien. See Medicaid.gov — Estate Recovery.

Question 3: What happens to the home after death?

This is where most of the surprise happens. Every state is federally required to attempt Medicaid Estate Recovery for long-term care costs paid on behalf of a beneficiary age 55 or older — and the home is very often the only asset of real value left in the estate to recover from. Estate recovery is paused (not eliminated) while a surviving spouse or a minor/disabled child is alive, and states must have an undue-hardship waiver process. The full mechanics, including which states can reach beyond probate assets, are covered on Medicaid Estate Recovery and Your Home. Source: Medicaid.gov.

Why this belongs to Pillar 10, not just Pillar 6

Advance Medicaid trust and deed planning (Pillar 6) is the legal mechanism. The home itself — its equity, its maintenance cost, who's living in it, and the family's timeline — is the asset those mechanisms act on. That's why the home gets its own pillar here: the legal tools only matter once the family has actually made a decision about the house.