How to Protect Your Home From Medicaid

An individual can protect their assets, including their home, from Medicaid by placing them into a trust. Once transferred, the assets are owned by the trust rather than by the individual. This can reduce the individual’s countable assets for Medicaid eligibility purposes, offering a way to conserve wealth for heirs while still qualifying for Medicaid-funded care. That said, the strategy carries real downsides, including a permanent loss of control over the assets and strict timing rules, so it isn’t right for everyone.

Consulting an elder law attorney or financial advisor before making any transfers. They can help you balance asset protection with the flexibility to access funds for medical care.

What Assets Count for Medicaid?

Medicaid, the U.S. health program for low-income individuals and families, comes with its fair share of eligibility requirements. When determining eligibility for Medicaid, the program takes into account both income and assets. It evaluates an individual’s assets through a “means test.” The assets counted vary by state but generally include cash, bank accounts, retirement accounts, real estate and vehicles, subject to limits that can change annually.

Not all assets count, however. Exempt assets typically include a person’s primary residence, personal belongings, one vehicle and prepaid funeral and burial expenses. Non-exempt assets, which do count toward the Medicaid limit, include additional bank accounts, stocks, bonds and second homes. For example, a significant stock portfolio would count toward the Medicaid asset test and could affect eligibility.

Is It Necessary to Put Your Primary Residence in a Trust to Protect It From Medicaid?

An applicant’s primary home is typically exempt from the Medicaid asset limit. As such, placing it in a trust usually isn’t necessary. If you are temporarily living elsewhere, like in a nursing home or hospital, your home still usually qualifies as your primary residence. Medicaid also typically disregards the value of your home if your spouse or certain dependent relatives are living there.

However, if the home isn’t your primary residence, or your equity in it exceeds a certain limit, you may need to transfer the property to a trust to protect it from Medicaid.

Equity limits vary by state, so it’s important to check with your state’s Medicaid program for current figures. In 2026, these limits range from $752,000 to $1,130,000, depending on the state.

Click Your State to Get Matched With Financial Advisors That Serve Your Area

Choose your state and answer some questions to get matched with up to three fiduciary advisors that serve your area.

What Is the Medicaid Look-Back Period?

The Medicaid look-back period is a stipulated duration during which Medicaid examines an applicant’s financial transactions to see if any assets were transferred for less than fair market value. In most states, this period is 60 months.

For example, if Jane, a retired nurse, transferred her beach house to her children during the look-back period in order to qualify for Medicaid, that transfer could trigger a penalty period of Medicaid ineligibility. Strategic Medicaid planning needs to account for this window well in advance to avoid unintended penalties.

How to Protect Assets From Medicaid With a Trust

Medicaid is a U.S. health program for low-income individuals and families, as well as others in need.

It’s possible to use a trust to reduce countable assets for Medicaid eligibility. However, the type of trust you use matters. A revocable living trust does not provide Medicaid protection. That’s because the assets remain under the grantor’s control and are therefore still technically available to them. By contrast, an irrevocable trust, such as a Medicaid asset protection trust (MAPT), transfers ownership of the assets out of the individual’s estate and places them under the control of an appointed trustee.

How Work Medicaid Asset Protection Trusts (MAPTs) Work

A MAPT is an irrevocable trust specifically designed to hold assets in a way that excludes them from Medicaid’s means test. Creating a MAPT means giving up legal ownership and control of the assets the trust holds. However, the grantor can still name beneficiaries. The grantor may also retain the right to live in the home or receive income the trust generates. But because these assets are no longer accessible to the applicant, they typically do not count when Medicaid evaluates eligibility.

Common assets placed in MAPTs include a primary residence, vacation property, bank accounts, brokerage accounts and sometimes business interests. Retirement accounts like IRAs generally aren’t placed into the trust due to tax complications, but non-qualified investments often are. Once they transfer their assets into a MAPT, the grantor can no longer sell, spend or gift these assets, though the trust may allow limited income to flow back to them.

Considerations Before Using a Trust

Timing is key for a MAPT to work. If an individual transfers assets into the trust within Medicaid’s five-year look-back period, they may be subject to a penalty period of ineligibility. That’s why people often use MAPTs proactively, years in advance of anticipated long-term care needs.

Using a MAPT can protect wealth and preserve inheritance, especially for families concerned about the cost of long-term care. But it also comes with trade-offs. The person creating the trust gives up control of the assets and cannot undo the transfer. They also may face unintended tax or estate consequences. Because of these constraints, it is essential to tailor this legal strategy to individual circumstances and plan well ahead of time.

Other Implications of Shielding Assets From Medicaid

Shielding assets from Medicaid involves more than financial considerations—it raises ethical questions, too. Some view it as legitimate wealth preservation. Others, however, see it as exploiting a program designed to help those in genuine need. Anyone considering this strategy should weigh these ethical dimensions and ensure any planning stays within strict legal bounds.

That said, protecting assets in a trust can prevent a healthy spouse from ending up impoverished when the other requires long-term care. It can help avoid a situation where it’s necessary to sell the family home to cover medical expenses. These protections are important, particularly for lower and middle-class families who might face severe financial hardship due to long-term care costs.

Medicaid Estate Recovery and Trust Assets

Medicaid estate recovery requires states to seek reimbursement for certain benefits paid on behalf of a recipient after death, most commonly for nursing home and home- and community-based care received after age 55. Recovery is generally limited to the deceased person’s estate, but what counts as an “estate” varies by state. Many states limit recovery to probate assets. Others, however, use a broader definition that can include non-probate interests. This may include jointly owned property or assets passing by beneficiary designation.

Trust ownership changes how estate recovery applies. Assets held in a properly structured irrevocable trust are usually not considered part of the Medicaid recipient’s estate because the individual no longer owns or controls them. As a result, those assets are typically outside the scope of recovery. By contrast, assets held in a revocable trust remain reachable. That’s because Medicaid treats them as still owned by the individual during life and at death.

The family home is often the focal point of recovery. While a primary residence may be exempt during life for eligibility purposes, it can still be subject to recovery after death if it passes through probate. Transferring a home to an irrevocable trust before the look-back period expires can remove it from the probate estate and limit exposure to recovery. Timing, deed structure and retained rights, such as a life estate, all have impact on what happens with the family home.

Estate recovery rules intersect with broader planning decisions. Trusts, beneficiary designations and ownership structures affect not just Medicaid outcomes but also estate administration, taxes and the inheritance heirs ultimately receive. A trust that limits recovery may also restrict control or flexibility during life. Because of these trade-offs, it’s important to evaluate Medicaid planning alongside the broader estate plan rather than in isolation.

Bottom Line

A man signs documents setting up Medicaid asset protection trust.

While primary residences typically aren’t considered in a person’s Medicaid application, there are certain circumstances where a home is not exempt from Medicaid’s asset limits. In these cases, an irrevocable trust like a Medicaid asset protection trust (MAPT) can protect a home from Medicaid. For that to work, however, it’s necessary that the transfer occurs beyond the range of the five-year look-back period.

Long-Term Care Planning Tips

Long-term care can be exceedingly expensive. Long-term care insurance can help you cover those costs. Here’s a look at some of the best long-term care insurance providers.
Working with a financial advisor may help you plan and save for future health care expenses. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.