What Happens to My House If My Spouse or I have to Go Into Assisted Living?
This is one of the most common concerns people have when planning for the future. The short answer is that no one can simply take your home from you for going into assisted living or a nursing home. However, the way your home is treated financially can depend on whether one spouse remains in the home, how you pay for care, and whether Medicaid (TennCare in Tennessee) becomes involved.
Understanding your options ahead of time can help you protect your home and reduce stress later on.
Paying for Care: When You May Need to Sell the Home
If both spouses move into assisted living or nursing home care, and there are not enough savings or income to cover the monthly costs, you may find that the home becomes the most available source of funds. In that case, selling the home may be necessary to help pay for the cost of care. Long-term care is expensive, and many families rely on Medicaid once personal resources are used.
Medicaid (TennCare) and the “Spend-Down” Process
Medicaid is designed for people with limited financial resources. To qualify, you must “spend down” your assets to a certain level. This includes assets such as:
Checking and savings accounts
Investments
Real Property not being used as your primary residence
If your home is held in a revocable living trust, it is not protected from Medicaid spend-down rules. Even though the home is in the trust, Medicaid still counts it as part of your estate because you can revoke or change the trust. This means the home may need to be used to pay for care before Medicaid assistance begins.
When One Spouse Stays Home
If one spouse enters long-term care but the other spouse continues living in the home, Medicaid allows the spouse to utilize the house without penalty to the spouse needing long-term care. In this situation:
The spouse receiving care may still qualify for Medicaid.
The home does not need to be sold while one spouse is still living there.
However, after both spouses have passed away, Medicaid may seek repayment for care costs from the estate. This is called Medicaid estate recovery, and it can include the value of the home.
Can You Protect the Home Through Planning?
Yes, in some situations. An irrevocable trust, sometimes called a Medicaid Asset Protection Trust (MAPT) can sometimes protect your home from Medicaid spend-down and estate recovery. However, this must be done well in advance of applying for Medicaid, usually at least 5 years before care is needed, due to the Medicaid 60-month look-back period. Transfers made within the look-back window can delay eligibility. This is why early planning is so important.
Other Assets Medicaid Allows You to Keep
Medicaid generally lets applicants keep:
One vehicle
Personal belongings
A limited amount of income or savings
These protections are designed to prevent a spouse at home from being left without resources.
Planning Ahead Matters
If your goal is to preserve your home for your family, rather than use it to pay for long-term care, it is wise to plan before care is needed. Options exist, but they work best when implemented early. Our firm offers a one-hour consultation where you can meet with an attorney to review your situation and consider next steps. If you decide to move forward with additional estate planning with us after that meeting, the consultation fee is credited toward that work. Call today to arrange for an appointment with one of our Elder Care attorneys at Vermillion Law (865) 233-3353.