Can the Nursing Home Really Take Mom's House?
Few topics stir up as much confusion—and, frankly, fear—as the idea that a nursing home might snatch away a beloved family home or farm after a loved one’s passing. It’s the sort of nightmare scenario that makes people want to bury cash in coffee cans. But is it true? Can a nursing home really take Mom’s house?
The short answer: not directly. But the longer answer involves Medicaid, estate recovery, and a little bit of myth-busting.
First, let’s get one thing clear: nursing homes themselves are not generally in the business of seizing houses. They don’t have a secret real estate division salivating over your family’s property. Instead, the real issue often comes into play when Medicaid steps in to help cover the cost of long-term care—a common scenario given the astronomical expenses associated with nursing homes.
How Medicaid Works
When an individual’s resources dwindle, Medicaid often becomes the financial safety net. In North Carolina, Medicaid pays the nursing home directly for care once the individual qualifies. But Medicaid isn’t a free lunch; it’s more like an advance that must be repaid later.
This expectation comes in the form of Medicaid estate recovery. Under federal law, states are required to seek reimbursement for Medicaid benefits paid on behalf of someone 55 or older when they die. This means Medicaid has the right to file a claim against the deceased person’s estate for the amount it spent on their care.
Don’t get me started: It’s an expensive program for the state to provide but the estate recovery catch-22 ensures that the very program meant to assist families in dire straits inadvertently makes the next generation just as reliant on such assistance!
What’s an Estate Claim?
Here’s where the family home comes into the picture. When someone passes away, their “estate” includes all the assets they owned—including real estate for purposes of paying debts. If Medicaid files a claim against the estate, the executor must pay that claim before distributing the remaining assets to heirs. If the estate doesn’t have enough cash to cover the claim, the house might need to be sold.
Notice the subtle but critical distinction: Medicaid doesn’t “take” the house. Instead, the sale of the home is often the result of the estate’s legal obligation to pay back Medicaid for services already rendered.
And how does Medicaid find out about the estate in the first place? Well, your executor has to tell them of course. Under N.C. Gen. Stat. § 28A-14-1:
…every personal representative…shall personally deliver or send by first class mail to the last known address a copy of the notice…if at the time of the decedent's death the decedent was receiving medical assistance as defined by G.S. 108A-70.5(b), to the Division of Health Benefits of the Department of Health and Human Services.
Are There Protections?
The good news is that there are safeguards to prevent undue hardship. For example, Medicaid’s estate recovery efforts are deferred if a surviving spouse, minor child, or disabled adult child lives in the home. North Carolina also offers exemptions and waivers in certain cases to protect low-value estates or where recovery would cause significant hardship.
With careful planning—and yes, a knowledgeable estate planning attorney—it’s often possible to shield significant assets for your heirs while ensuring your loved one receives the care they need.
The Real Trouble
The biggest challenge isn’t Medicaid or even the nursing home. It’s misinformation. Too often, families wait until they’re in crisis mode to ask questions. By then, options are limited, and the stress is high. The result? Persistent myths about nursing homes taking your home.
Medicaid estate recovery is a legal mechanism designed to ensure the sustainability of a program that provides essential care to millions. Because it can have extremely harsh outcomes in many cases, understanding the rules can mean the difference between protecting your family’s legacy and scrambling to make sense of things after the fact.
The Bottom Line
If you’re worried about protecting Mom’s house, don’t panic. But don’t wait, either. The earlier you start planning, the more options you’ll have to navigate Medicaid’s estate recovery process. Talk to a professional, get the facts, and put a plan in place. When it comes to estate planning, knowledge isn’t just power—it’s peace of mind.