Can You Lose Your House If You Need a Nursing Home?
When families are faced with the need for nursing home care, confusion sets in quickly.
One of the most common fears we hear is:
“Will the government take my house?”
The answer is more complicated than most people realize.
Does Medicaid Count Your House?
From a Medicaid eligibility standpoint in Ohio, your primary residence is typically considered an exempt asset — at least initially.
That means when you apply for Medicaid, your home is usually not counted toward the asset limit.
However, that does not mean the house is automatically protected long term.
Here’s where problems begin.
The Income Problem No One Talks About
When someone enters a nursing home and qualifies for Medicaid:
- Most of their monthly income must go toward the cost of care.
- A single individual is typically allowed to keep only a very small personal needs allowance (often around $45 per month).
That raises a serious question:
How do you continue paying:
- Property taxes?
- Homeowners insurance?
- Utilities?
- Maintenance?
Even though Medicaid doesn’t immediately “take” the house, it can become financially impossible to maintain it.
What Happens If the House Is Sold?
If the home is sold while the individual is alive:
- The sale proceeds become countable assets.
- Those proceeds generally must be spent down on care before Medicaid will continue paying.
This is where families often feel trapped.
What About After Death? (Estate Recovery)
There’s another important piece many families don’t realize.
After a Medicaid recipient passes away, Ohio has the right to seek reimbursement from the person’s estate for benefits paid.
This is called estate recovery.
If the home is still in the person’s name at death, it may need to be sold from the estate to repay the state.
This is likely where the fear of “the government taking your house” originates.
Should You Just Give the House to Your Kids?
We are frequently asked:
“Should I just transfer my house to my children?”
Gifting your house outright can create:
- Serious tax consequences
- Capital gains problems
- Loss of control
- Risk if your child divorces, is sued, or has creditor issues
- Medicaid penalty periods if done within 5 years of applying
While gifting may sound simple, it can create long-term financial damage if not handled properly.
A Safer Option: Asset Protection Trust Planning
In many elder law cases, we recommend transferring the home into a properly structured Asset Protection Trust.
When designed correctly:
- The home may be protected from future long-term care costs
- You avoid major tax mistakes
- You maintain certain protections and structure
- Estate recovery may be avoided
This type of planning works best when completed at least five years before the need for nursing home care.
What If You Don’t Have 5 Years?
Many families assume it’s “too late.”
That is rarely true.
Even in a crisis situation, legal tools may still be available to:
- Protect a portion of assets
- Preserve income for a spouse
- Reduce unnecessary spend-down
The worst mistake is doing nothing because you believe it’s too late.
Learn Your Options Before You Decide
At Red Wagon Law Firm, we help Ohio families understand:
- Medicaid eligibility rules
- Asset protection trust planning
- Crisis Medicaid planning strategies
- Estate recovery prevention
Before transferring your home or making irreversible decisions, speak with an experienced elder law attorney.
You can also learn more by attending one of our upcoming educational workshops.