Can a Nursing Home Take My House? (And What Medicaid Actually Does)

TL;DR – The Short Version

No. A nursing home cannot take your house, and neither can Medicaid while you’re alive. In Indiana, your home is generally an exempt asset — protected if you live there, intend to return, or if your spouse, minor child, or disabled child lives in it. What actually happens is that families sell the house because nobody told them they had a choice. 

• The nursing home is a business, not a lien-holder. It bills you. It can sue for unpaid bills like any creditor. It cannot seize your home. Watch the “responsible party” clause in the admission agreement before you sign it. 

• A spouse at home keeps the house. Federal spousal impoverishment rules protect the community spouse, who can also keep up to $162,660 in countable assets in 2026. 

• Estate recovery is real, but it happens after death. Indiana can file a claim against your estate for what Medicaid paid after age 55. As of July 1, 2026, the State has nine months after death to do it — up from 120 days. 

• Don’t put the house in your kid’s name. Medicaid looks back five years. A transfer triggers a penalty period, leaving you with no house and no Medicaid. 

• Real strategies exist, including life estate purchases, personal service agreements, certain irrevocable trusts, and Indiana’s Long Term Care Partnership policies. All of them require timing and design. None of them work as a blog-post recipe. 

• Watch the fee. Some attorneys charge $10,000 to $20,000 for Medicaid planning, priced off the months of coverage you’ll qualify for rather than the work performed. Ask for a set fee and an explanation. 

• Start before the crisis. Good planning shouldn’t cost you your assets, a surprise tax bill, or the years you still feel good. 

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Can a Nursing Home Take My House?

No. A nursing home cannot take your house. 

Nobody – at least not the facility or the State – is coming for the deed to your home. 

That’s the short answer, and it’s the honest one. 

Let’s dig into “take” a little bit. Neither the State nor a nursing home will take you home directly. However, it might suggested that you sell it to cover costs since you won’t be living there anyway. 

Quick note – the other spouse, a sibling, a child all provide options that keep the house out of being a potential asset that might be sold, or even encouraged to sell.  

While nobody take your house, many people sell it or try to give it away anyway.  

In some cases, people “give it away” because they thing that will protect it from being taken. What many people don’t understand is that can be a bad idea for many reasons, and it may not even help get long-term care sooner.  

Understanding the difference between what a nursing home wants, what Medicaid requires, and what the State can collect later is the whole ballgame. 

Let’s separate those three things, because almost everyone walks in with them jumbled together. 

What Can a Nursing Home Actually Do? 

A nursing home is a business. It provides care, it sends a bill, and it would very much like that bill paid with your money rather than Medicaid’s. 

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That’s not sinister. It’s arithmetic. A semi-private room in Northwest Indiana can run north of $10,000 a month. When Medicaid pays for that same bed, the facility receives substantially less. Which is why facilities keep a limited number of “Medicaid beds,” and why an admissions coordinator will ask detailed questions about your assets, your income, your real estate, and — if you’re married — your spouse’s assets too. 

So the nursing home will look at the house. It will assume the house is available. It may gently suggest that selling the house is the sensible thing to do. 

That is not the same as taking it. 

What a nursing home can do, if bills go unpaid, is what any unpaid business can do: sue, get a judgment, and enforce that judgment. Which brings me to something almost nobody reads before signing it. Nursing home admission agreements often contain a “responsible party” clause — language that can obligate the person signing to make sure the bill gets paid. Adult children sign these without a thorough revie of the documents. 

Read that paperwork. Or have someone read it for you before you sign. 

So Does Medicaid Make You Sell the House? 

Usually, no. 

Medicaid is the federally-funded, state-run program that pays for roughly half of all long-term care in nursing homes. It’s means-tested, meaning there are limits on your income and on your “countable resources.” These are the assets Medicaid considers available to spend on your care before it will pay a dime. 

Here’s the part that surprises people: your home is generally not a countable resource. 

In Indiana, the home is exempt if you live in it, or if you’re in a facility but have an Intent to Return home, so long as your equity in it doesn’t exceed $752,000 in 2026. Equity means what the house is worth minus what you owe on it.  

The home is also exempt if is the primary residence of: 

• your spouse,  
• a child under 18,
• a disabled or blind child of any age, 
• a caretaker child who lived with the parent for at least 2 years prior to applying.  

Read that again, because for years the advice floating around church basements and Facebook groups has been the opposite. Plus, those aren’t the only options.  

What Medicaid does is put families in a position where selling the house feels like the only option.

Bills are enormous. Nobody’s living there. The taxes and insurance keep coming. So, the family sells. 

Being encouraged to sell is not the same as being required to sell. Those are two different sentences with two very different outcomes. 

Does My Spouse Have to Leave the House? 

No. 

If one spouse enters a nursing home and the other stays home, the house is protected. Federal spousal impoverishment rules exist precisely so that one spouse’s illness doesn’t bankrupt the other. Indiana also lets the at-home spouse — Medicaid calls this person the “community spouse” — keep a defined share of the couple’s countable assets. In 2026, that’s up to $162,660, with a floor of $32,532. 

The house stays. The spouse stays. 

This is the single most common fear families carry into my office. It’s also the one I can put to rest the fastest. 

Then What Is Estate Recovery? 

This is the “you can pay me now or you can pay me later” part. 

Suppose you plan well, keep the house, and Medicaid ends up paying for a portion of your nursing home care. When you die, Indiana’s Medicaid Estate Recovery Program allows the State to file a claim against the decedent’s estate to be repaid the amount it spent on you after age 55. 

Three things to understand about it. 

First, it happens after death. It is a claim against the decedent’s estate, not a seizure during your lifetime. It also cannot proceed if you’re survived by a spouse, a child under 21, or a child who is blind or disabled. Hardship waivers exist. It is not automatic and it is not inevitable. 

Second, the timeline just changed. For the last two years the State had 120 days after death to file its claim. As of July 1, 2026, that window expands to nine months. If you handle estates for your family, that’s a date to know. 

Third — and this is where I’ll be straight with you rather than reassuring — Indiana’s statutory definition of “estate” is broader than probate. On paper, it reaches property that passed by joint tenancy with right of survivorship created after June 2002, money sitting in a payable-on-death account, assets moved into a revocable trust after May 2002, certain annuities, and what’s left in a Miller Trust. 

In practice, the State is not currently going out and opening estates to chase those transfers down. It would have to, to reach them. 

But notice what that means. “The State isn’t doing that right now” is a description of an enforcement posture, not a law. Enforcement postures change. Attorneys general change. Budgets change. A plan whose entire protection depends on the State choosing not to bother is not a plan. It’s a bet. 

Plan for the statute. Be pleasantly surprised by the practice. 

Can’t I Just Put the House in My Daughter’s Name? 

Please don’t. 

People still say this works. It doesn’t, and the way it fails is expensive. 

Medicaid looks back five years at everything you gave away or sold for less than it was worth – the term is Transfer for less than fair market value.  

Transfer the house to your daughter, apply for Medicaid inside that window, and Medicaid imposes a penalty period — a stretch of months during which it will not pay for your care, calculated from the value of what you gave away. 

Now count the cast of characters in that scenario. You need care. You have no house to sell, because you gave it away. And you have no Medicaid, because you gave it away. Your daughter owns a house; she now has to figure out how to turn it into your nursing home payments, on top of whatever capital gains problem she inherited along with the deed. 

There are circumstances where a home can pass to a child without triggering any of this. They’re narrow, they’re specific, and they depend on facts that had to be true for years before anyone thought about Medicaid. That’s a conversation, not a form. 

What Can Actually Be Done? 

Quite a lot, when there’s time. 

There is a real menu of techniques designed to protect all or part of the value of a home: purchases of a life estate, personal loans, joint purchases, personal service and caregiver agreements, certain irrevocable trusts, and — a tool unique to a handful of states, Indiana among them — a Long Term Care Insurance Partnership policy, which shields protected assets from estate recovery entirely. 

I’m not going to teach you to execute any of these in a blog post, and you should be suspicious of any attorney who tries. 

Here’s why. Every one of these requires precise design, precise timing, and a commitment from someone other than the person who needs care. Not every technique fits every family. Some of them are wrong for you in ways that won’t be obvious until someone sits down with your actual numbers. The right question isn’t “which trick do I use.” It’s “what’s true about my situation, and what does that make possible.” 

What Should This Planning Cost? 

Now we get to the part of this article nobody else will write. 

There are attorneys who charge $10,000, $15,000, $20,000 or more for “Medicaid Planning.” Some of them arrive at that number by calculating the theoretical months of Medicaid instead of paying privately.  

Read that sentence again. The fee has no relationship to the work performed. It’s a percentage of your fear. 

Sometimes a five-figure fee is warranted. Complex facts, real estate in three counties, a family business, a blended family — that’s genuine work and it deserves genuine compensation. But when the fee is set before anyone has looked at your situation, the fee isn’t a fee. It’s a toll. 

Two things to watch for. 

Be careful when a plan involves emptying a retirement account in one transaction. A single large IRA withdrawal can hand you an income tax bill you didn’t expect and, two years later, a Medicare premium surcharge you definitely didn’t expect. The plan “worked.” You just paid for it twice or more: Quick Math: Withdraw $150,000 from your IRA in a single year and you will pay 25% to 30% or more in taxes on that next year – that’s another $40,000 or more.  

And the “cost” for this planning may not be finished yet. Some attorney work with companies to put that money in structures that charge premiums up front.  

Your “plan” to protect your assets from Medicaid or nursing homes may cost more than most people ever pay in long-term care costs.  

At CCSK Law, we quote a set fee. You’ll know what it is and what it covers before you agree to anything. If you don’t understand what an attorney is charging you or why it’s relevant to your situation, ask. Ask again. A good answer exists, and you’re entitled to hear it. 

Learn more about my approach to planning and fees. 

What Good Planning Shouldn’t Cost You 

One more thing, because I think it gets lost. 

Planning for long-term care should not mean going broke on purpose. It should not mean triggering a tax bill so you can qualify for a program. And it should not mean spending the years when you feel good living like the years when you won’t. 

You deserve the best quality of life that you want to enjoy and afford, with all of your assets available to do it.  

You’ve got trips you want to take. A grandkid’s wedding. A boat, a workshop, a tee time on a Thursday. The point of planning ahead is that you get to keep those.  

Good planning is quiet. It sits underneath your life instead of rearranging it. 

I tell all my clients one of my primary goals is to get plans in place, understand when we need them, then put your binder on the shelf and go live life.  

Crisis planning is loud, and it’s expensive, and it forces choices nobody wants to make. That’s the real cost of waiting. 

When Should You Start? 

Not the week after mom moves into the facility. 

By then, the nursing home and Medicaid hold most of the cards. Some things can still be done — I’ve done them — but the good options are behind you. 

If long-term care is anywhere on the horizon, have the conversation now. Talk through the assets, the income, the family, and what you actually want the next ten years to look like. You may find there are steps worth taking today. You may find in-home options that keep someone in their own house years longer, which is what most people want anyway. 

Talk to your financial advisor – if you don’t have one, find one. They have tremendous planning options to help responsibly, strategically plan for future expenses.  

Find an Elder Law attorney willing to have that first conversation for free or for a very limited fee. If they won’t, that tells you something. 

Valparaiso and Lafayette Elder Law & Estate Planning 

For most families, the house is one of the biggest thing they own and the thing they most want to have a say in what happens to it.  

What happens to it if long-term care becomes necessary is worth understanding before it becomes urgent. 

It’s complicated. It’s also knowable. We’ll walk you through the options and the consequences of each, and I’ll do it in language that lets you understanding why, not just what. 

At CCSK Law, we are willing to help you understand your questions and specifics of your situation clearly. We can help build a plan for today, with an eye on the future. 

Call us to set up your complimentary consultation –  (219) 230-3600.  

You can also visit our website for more information about planning and long-term care considerations at www.MedicaidinIndiana.com 

There is no charge for the first conversation. Let us help you make a plan to meet you and your family’s needs. 

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This article is for general informational purposes only and does not constitute legal advice. Every family’s situation is different, and Medicaid and estate recovery rules can change. If you have questions about how this applies to you, talk to a licensed attorney.

Common Questions About Medicaid and Your House in Indiana

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