When thinking about long-term care, one of the biggest worries is losing your home to qualify for Medicaid. Many people assume they must sell or spend down their property first. In New York, the rules are more flexible than most realize. With the right planning, you may keep your home and still receive Medicaid benefits for nursing home or in-home care.
How Medicaid views your primary residence
Medicaid treats your primary home differently from other assets. As long as the home’s equity value is under a certain limit and you intend to return there, it is often exempt from the eligibility calculation. This means the home does not have to be sold before applying for Medicaid. In New York, this exemption applies even if you move into a nursing facility, as long as you express an intent to return home.
What happens when a spouse or dependent lives at home
If your spouse or a dependent relative continues living in the home, Medicaid will not count it as a resource. This protection is called the “spousal impoverishment rule.” It allows the healthy spouse to remain in the home without being forced to sell or deplete assets. Planning early can help preserve this protection and prevent unnecessary financial strain.
How to protect your home for future generations
Although your home may be exempt during your lifetime, Medicaid may seek reimbursement from your estate after your death. This process, called estate recovery, allows the state to collect what it paid for your care. Many families use a Medicaid asset protection trust to transfer ownership of the home while retaining the right to live in it. If created and funded more than five years before applying for Medicaid, the home is typically protected from recovery.
Planning ahead to keep your options open
Timing plays a key role in Medicaid planning. Waiting until health declines can limit your options and increase financial risk. By setting up the right legal tools early, you can keep your home, qualify for care, and preserve assets for your family.