When a loved one needs long-term care—whether it’s in an assisted living facility or a skilled nursing home—families are often faced with overwhelming financial decisions. One of the most common misconceptions we see in our elder law practice is the belief that selling the family home is necessary to afford care or to qualify for Medicaid. While this may seem logical on the surface, it can have serious unintended consequences.

What Is Medicaid and Why Does the Family Home Matter?

Medicaid is a state and federally funded program that helps cover the cost of long-term care for those who qualify financially. To be eligible, an applicant typically must have less than $2,000 in countable assets. However, a primary residence, also known as the homestead, is typically exempt from Medicaid’s asset calculation—as long as certain conditions are met. This means that if your loved one is moving into a skilled nursing facility or assisted living and the home is still considered their primary residence, Medicaid will not count it against them.

Why Selling the Home Can Be a Mistake

Many families believe that selling the home is the responsible thing to do—after all, those funds can help cover care expenses. But here’s the catch: the moment the house is sold, the proceeds become a countable asset. That instantly disqualifies your loved one from Medicaid if their bank balance exceeds $2,000. This not only delays their access to care but also forces the family into crisis planning to try to protect the funds from being rapidly depleted.

Better Options Than Selling

Instead of rushing to sell, consider alternative strategies. With proper planning, it may be possible to:

• Rent the property to generate income without affecting eligibility
• Transfer the home to a qualified family member under Medicaid rules
• Establish a trust to hold the home under certain conditions
• Delay the sale until after the Medicaid recipient has passed, using estate planning tools like a Lady Bird Deed to avoid probate

Each family’s situation is unique, and Medicaid rules vary by state, that’s why consulting an elder law attorney early is critical. The right advice can help preserve the home, maintain Medicaid eligibility, and give your loved one access to the care they need without unnecessary financial loss.