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What happens to the house?
For most families the home is the biggest thing they own and the hardest to think about. The answer has two parts, and each works by its own rules: what happens while your person is alive and on Medicaid, and what happens after they die.
While they are alive
The home a person lives in is often not counted, so it usually does not have to be sold to qualify. That depends on the program, the state's rules on home value, if the person truly means to return home, and who else lives there. Often that is a spouse, a child under 18, or a child with a disability.
We are not going to give you a national rule here, because there is not one. What we can give you is the question to ask your state Medicaid office before you sell the home, sign it over, or borrow against it: is this home left out for this program, at this value, with this person living in it? Spending down explains why a comforting list from any website is worth less than the state's own answer.
After death: estate recovery
"Estate recovery" means the state trying to get back what Medicaid paid, out of what the person leaves behind. This part surprises almost everyone, so here it is in CMS's own words: "For individuals age 55 or older, states are required to seek recovery of payments from the individual's estate for nursing facility services, home and community-based services, and related hospital and prescription drug services."[1]
Note what that does and does not say. The state makes a claim on the estate. It does not seize a house. The rule applies to people age 55 or older. And it covers those kinds of services, not every dollar Medicaid ever spent, though states may collect for other services too.[1]
For most families the home is the main thing in the estate. So a home that was not counted while your parent was alive is not always safe to pass on. States differ a great deal in what they count as the estate (only what goes through probate court, or more) and in how hard they push to collect.
Who blocks collection after death, and who blocks a claim on the house
It is not as simple as "the state takes the house." But there are two sets of protections, and they are different. Mixing them up is how families get bad news late.
Collection after death (estate recovery). CMS says: "States may not recover from the estate of a deceased Medicaid enrollee who is survived by a spouse, child under age 21, or blind or disabled child of any age."[1]
A claim on the house during life (a lien). A lien is a legal claim on property. A state may put a lien on a home while the person is living in a care facility, except when one of these people lives in the home: the spouse, a child under 21, a blind or disabled child of any age, or a brother or sister who is a part owner of the home. And CMS is clear that "the states must remove the lien when the Medicaid enrollee is discharged from the facility and returns home."[1] Notice that the brother or sister is on the lien list but not on the list for collection after death.
Undue hardship. States "are also required to establish procedures for waiving estate recovery when recovery would cause an undue hardship."[1] So heirs can ask the state not to collect. What counts as hardship, and how to apply, is up to each state. Ask for the steps in writing. An earlier version of this page said federal guidance points mainly to modest homes and to property that earns income, such as a family farm. We could not confirm that on the CMS page, so we took it out.
The correction we owe you about the caregiver child
This page used to list a caregiver-child rule among the things that protect a home from collection after death. It said an adult child who lived there and gave care "may keep the home." That mixed up two different rules. We are fixing it in the open, not quietly.
What is true: federal law (42 U.S.C. §1396p(c)(2)) has an exception to the penalty for giving things away. It covers a home given to a son or daughter who lived in it for at least two years right before the parent went into a care facility, and who gave care that let the parent stay home. The state decides if the care counts.[2] That rule is about giving the house away with no penalty. It is covered on the caregiver child exemption page.
What is not true: that this also protects the house after death. CMS's rules on collecting after death do not list that exception. The two rules are run separately.[1] Some states have their own protections for caregivers, and some do not.
So here is the honest advice: do not count on the caregiver-child rule to protect a house after death unless you have your state's real rule in front of you. Ask the state Medicaid agency, or an elder-law attorney in that state. Get the answer in writing before the house changes hands.
Why this is worth facing early
The legal ways to deal with a home take time, because of the look-back. Moves made in a hurry, just before applying, tend to cause the very penalty they were meant to avoid. Families who look at this early often have choices. Families who meet it in an emergency often do not.
We cannot tell you what to do with your home. This page is here to put the question in front of you while there is still time to answer it.
What only your state can tell you
Every detail here is up to your state: the limit on home value, what counts as the estate, and how to ask for a hardship exception.
Who to ask: an elder-law attorney in your person's state; and your state Medicaid office, for its estate recovery policy in writing.
What to ask them:
- Is our home left out in this state, for this program? What is the limit on home value?
- What does this state count as the estate when it collects? What does it go after?
- Does this state have any protection for a caregiver child, in writing?
- Is there an undue-hardship exception? What counts, and how do heirs apply?
- With the time we have, are there legal choices left for the home?
Free local help. Your Area Agency on Aging will talk through your choices with you for free. Find yours through the federal Eldercare Locator at 1-800-677-1116 or eldercare.acl.gov (run by the Administration for Community Living).[3] An Area Agency on Aging does not decide what the state collects after death. To learn about the four kinds of local helpers, see Who helps me locally.
Sources and what they support
Sources checked 2026-09-19 using AI-assisted editorial research. This is a source check, not legal advice.
- CMS, Medicaid estate recovery. Supports every quoted sentence here: the age-55 requirement and the service categories states must seek recovery for; that states may not recover from the estate of an enrollee survived by a spouse, a child under 21, or a blind or disabled child of any age; the lien rules including the sibling with an equity interest and the requirement to remove a lien when the enrollee is discharged and returns home; and that states must establish procedures for waiving recovery for undue hardship. This federal page does not give any state's definition of an estate, its probate reach, its home-equity limit, its hardship criteria or its procedural deadlines, and it does not list a caregiver-child exception among the estate-recovery protections.
- 42 U.S.C. §1396p(c)(2), transfers of assets. Supports that the caregiver-child exception is an exception to the transfer rules, for a son or daughter who resided in the home for at least two years immediately before institutionalisation and who, as determined by the State, provided care permitting the parent to remain at home — and likewise the sibling exception requiring an equity interest and one year of residence. Statutory text about transfers. It says nothing about estate recovery, which is the distinction this page had wrong.
- Administration for Community Living, Eldercare Locator. Supports the referral route to a local Area Agency on Aging. It does not determine Medicaid eligibility, liens or estate recovery.
Corrected in this pass: the caregiver-child exception was listed as an estate-recovery protection, which CMS does not support — it is a transfer exception, and the two are separate. "Federal law shields the home" has been narrowed to the specific circumstances CMS lists. The claim that recovery is deferred entirely while a surviving spouse lives now follows CMS's own wording that states may not recover from that estate. The undue-hardship examples of modest homes and family farms have been removed as unverified.