May is recognized as Elder Law month by the National Academy of Elder Law Attorneys (NAELA) and members are encouraged to provide education about the particular legal challenges that older Americans face to bring awareness of these to the public at large. One of the most frequent concerns I hear from older clients is about protecting their home from loss to long-term nursing home care costs.  Given that a nursing home can cost $16,000 per month or more, this is a valid concern.  

There are essentially three ways to pay for long-term care:  1) private pay – recipients of care pay the cost from their funds; 2) long-term care insurance – this is insurance purchased and maintained by the care recipient the purpose of which is to pay for long-term care costs; and, 3) Medicaid (sometimes called MassHealth in Massachusetts).  Medicaid is the state and federally funded program that will pay the medical costs, including nursing home care costs, for individuals who are both medically and financially eligible for the program. 

Here are 5 things to know about how the home is treated for purposes of determining financial eligibility for Medicaid benefits to pay for long-term nursing home care costs. 

 

1. You don’t have to sell your home, but there will be a lien.  Many people think that they must sell their home in order to be eligible for Medicaid benefits.  Sometimes they believe this because they have been told so by the long-term care facility caring for their loved one.  This is not the case. The home is so-called ‘non-countable’ asset (up to $1,097,000 of equity in 2025) for purposes of determining Medicaid eligibility.  That means that a person may receive Medicaid benefits to pay for nursing home costs and still own his home.  However, the Commonwealth will file a lien against the property with the registry of deeds.  The amount of the lien is the amount the state pays on behalf of the Medicaid recipient. As such, the house cannot be sold without re-paying the state.   In addition, if the recipient is a single person and dies owning their home after receiving Medicaid benefits to pay for care, the state will file a claim against the recipient’s estate and seek repayment from the estate.

 

2. Keeping the home can be challenging.  Although the regulations permit a Medicaid recipient to own her home, this can be challenging since all but a small amount of the recipient’s monthly income must be paid to the nursing home each month toward the cost of care.  As such, the recipient’s income is not available to pay the real estate taxes, insurance, utility bills and the cost of upkeep on the home.  In some cases, family members will pay these expenses and hope to be reimbursed when the home is eventually sold. In other cases, the home will be rented and the rental income used to pay the property expenses.  Both of these options present challenges and should be thoughtfully considered before embarking on either. 

 

3. Transferring ownership of the house to the spouse in the community is usually advisable.    Many married couples own their home as tenants by the entirety which is a special form of joint ownership for married couples.  This form of ownership means that when one spouse dies, the house belongs entirely to the surviving spouse without the need for probate.  Although the house is a non-countable asset and the state is not permitted to file a lien against the property if there is a spouse residing in the home, it is usually prudent to transfer the home into the name of the community spouse when one spouse needs long-term nursing home care.  The reason for this is to protect the home from a lifetime lien or post-death claim (see #1 above) in the event the community spouse predeceases the nursing home spouse. There is no ineligibility period imposed for transfers of assets between spouses (see #4 below).

 

4. Special rules for certain transfers of the home.    The general rule for eligibility for Medicaid to pay for nursing home care costs is that if the applicant (or his or her spouse) gives away assets within the 5-year period preceding the application for benefits, he or she will not be eligible for benefits.  This penalty applies to transfers of the home as well as other assets even though the home is a non-countable asset.  However, there are some exceptions to this transfer penalty rule.   The most commonly used exception is the exception for transfers between spouses.  The Medicaid regulations permit assets, including the home, to be transferred between spouses without the imposition of any penalty period.  Taking advantage of this exception is a good way for a married couple to protect the home from a Medicaid lien when one spouse needs long-term care.  Other exceptions to the transfer penalty include transfers to a blind or disabled child and to certain types of trusts.  

 

5. Planning 5 years in advance of applying for Medicaid can preserve the home for your beneficiaries.   For people who want to preserve the value of their home for their children or other beneficiaries, planning in advance is the best way to achieve that goal.  Transferring the home to an irrevocable trust that complies with the Medicaid rules is a common planning strategy.  However, there are consequences to such a transfer that need to be considered to determine if this is the right planning for your situation.  

 

For many families, the home is their most valuable asset and they want to pass that value to their beneficiaries when they die.  The prospect of losing one’s home to long-term care costs worries many people.  Being informed of the Medicaid eligibility rules and how those rules apply in your situation is the first step in determining your options for preserving your home from loss to nursing home care costs. If we can help you navigate the rules and your options, please don’t hesitate to contact our office and make an appointment with one of our attorneys. 

 

Attorney Suzanne R. Sayward is a partner with the Dedham firm of Samuel, Sayward & Baler LLC which focuses on advising its clients in the areas of estate planning, estate settlement and elder law matters. She is certified as an Elder Law Attorney by the National Elder Law Foundation, a private organization whose standards for certification are not regulated by the Commonwealth of Massachusetts.  This article is not intended to provide legal advice or create or imply an attorney-client relationship. No information contained herein is a substitute for a personal consultation with an attorney. For more information visit www.ssbllc.com or call 781/461-1020. 

 

May, 2025

 

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