21 Aug How to Avoid a Nursing Home Taking Your House
Nursing homes in Illinois cost an average of $7,000 to $9,000 per month, depending on location and level of care. That’s well over $100,000 per year. Without a plan, families can be forced to sell the home or drain savings to cover those costs.
The good news: a nursing home cannot simply “take your house.” With proper planning, you can protect your home and still qualify for Medicaid if care is needed.
At ElderSmart and The Heartland Law Firm, we’ve guided families across Illinois through these decisions for decades. Here are the five most effective ways to keep your house safe.
Key Takeaways
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Medicaid rules—not the nursing home- determine whether your home is at risk.
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Planning before Medicaid’s five-year look-back period gives you the strongest protection.
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Tools like trusts, life estates, and exemptions can preserve your home.
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Professional guidance is essential to avoid costly mistakes.
1. Use a Medicaid Asset Protection Trust
A Medicaid Asset Protection Trust (MAPT) is one of the best ways to shield your home. By transferring ownership to an irrevocable trust at least five years before applying for Medicaid, the house is no longer considered your asset.
You still keep the right to live in it for life, and after your death, it passes directly to your heirs—safe from Medicaid estate recovery and probate.
2. Create a Life Estate
A life estate transfers ownership of the house to your chosen heir but lets you remain in the home as long as you live. When you pass, the property goes directly to the heir.
This setup removes the house from your estate, keeps it out of Medicaid’s reach, and avoids probate. As with trusts, timing is important—the earlier you set it up, the better.
3. Plan Around Medicaid’s Five-Year Look-Back
Illinois Medicaid rules require reviewing financial transfers made within five years of applying. If you move the house during that time, Medicaid can penalize you by delaying benefits.
For example: If you transfer a $200,000 home three years before applying, and the average monthly cost of care is $8,000, Medicaid could impose a 25-month penalty period where you’d have to pay out of pocket.
Planning more than five years in advance avoids this risk entirely.
4. Take Advantage of Illinois Exemptions
Even without early planning, there are situations where your home is protected. Medicaid cannot recover against your house if:
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A spouse still lives there
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You have a child under 21, or a child who is blind or permanently disabled
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Your estate is worth less than $25,000
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Recovery would create undue hardship for your heirs
These exemptions are built into Illinois law and can be lifesaving for families caught off guard.
5. Work with a Medicaid Planning Attorney
Medicaid planning is one of the most complex areas of law. Mistakes are easy to make—and can cost your family both time and money.
An experienced elder law attorney can:
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Review your assets and eligibility
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Set up trusts or life estates correctly
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Apply exemptions when they fit your situation
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Guide you through Medicaid applications and appeals
Marty Fogarty, founder of ElderSmart and The Heartland Law Firm, has been helping Illinois families for over 30 years. His work combines legal expertise with compassion, shaped by personal experience with Alzheimer’s in his own family.
Protect Your Home and Your Future
A nursing home cannot just take your house, but without a plan, Medicaid may. The earlier you prepare, the more options you have to protect your home, your savings, and your family.
Contact ElderSmart today to schedule a conversation about your situation and learn the best way to keep your home safe.
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