Can Nursing Home Costs Cost You Your Home?

Moving into a nursing home is stressful enough. But having to worry about losing your home to pay for it? That’s more than anyone should have to bear. Let’s examine the facts and what you can do to avoid this scenario.

It is possible for your home to be used for payment for your long-term care. And unfortunately, the rising nursing home costs aren’t making long-term care any easier to afford. In 2024, the annual national median cost for a private room in a nursing home was $127,750, representing a 9% year-over-year increase.

Many people simply can’t shoulder that cost. When that happens, government assistance—such as Medicaid—can help cover the bill. In turn, the government will seek to recoup its costs. This is referred to as “right of recovery.”

What is “right of recovery”?

Right of recovery is a legal principle in which a party (in this case the government), can seek reimbursement for what was paid out on your claim. When or how this happens depends on your marital status.

Will my spouse be able to stay in our home if I move into a nursing home?

If only one spouse needs long-term care, the other spouse will be able to stay in their home. However, the state will keep a tally of the financial assistance provided toward the long-term care bills and put a lien on your home to recoup what it paid.  Once both spouses pass, the proceeds from the sale of the home will be used to settle the lien.

But let’s say you’re in a nursing home and outlive your spouse, who remained at home. In this instance, the state may require you to sell your home to help pay for your long-term care costs. There are a few exceptions, most notably: if you have an adult child who lived in the home with you and acted as your caretaker for two or more years, or if you have a permanently disabled child. Should this be the case, you may be able to transfer ownership of the home to them, but you’ll need to consult with an elder care or estate planning attorney as soon as possible.

 What if I don’t have a spouse or dependent also living in the home?

If you don’t have a spouse or dependent who also lives in the home, you’ll need to sell it in order to qualify for assistance. In the event you pass away before the home sells, a lien will be placed on the home. Proceeds from the sale will be used to reimburse the state for the cost of your care.

Is there any way to ensure I won’t lose my home to long-term care costs?

Thankfully, with some advance planning, you may be able to avoid the above scenarios. However, it’s important to note that early action is key because your options will diminish with time. The sooner you start planning, the better. From insurance to legal tools like asset protection trusts, we can help you evaluate your choices.

We’ve seen firsthand how heartbreaking long-term care decisions can be and we’re passionate about helping clients like you preserve what’s most important. From adult children learning of a lien on their childhood home after their parents pass, to seniors fighting to keep ownership of their beloved residence, every situation is unique. Yet, many can be avoided with the right strategy. That’s why our team is here to serve you with heart, delivering compassionate service for life.