I meet with at least one spouse a week who is fearful of losing her house to the costs of long-term care for her husband.  “I don’t want the nursing home to take my house,” the client will tell me.

The fact of the matter is, the home is an exempt asset, meaning that the spouse can retain the home and her husband can qualify for Medicaid benefits.  This is true irrespective of the value of the home.  The wife could be living in a $200,000 home or a $2,000,000 home, she can retain the home as an exempt asset.

When dealing with a single person who is living at home, there is a limit on the equity value of the home.  In order to be exempt, in New Jersey, the equity value of the home (the fair market value less encumbrances such as a mortgage) cannot be greater than $750,000.  So, if a single person is living at home and seeks to qualify for Medicaid benefit at home, for instance, having Medicaid provide a home health aide to her, the equity value of her home must be no greater than $750,000.

If the equity value is greater than $750,000, then the value the exceeds $750,000 is a countable asset that could disqualify the individual from receiving Medicaid benefits.

Understanding how your home may be exempt allows you to plan strategically for Medicaid while keeping your primary residence secure for your family.

The Medicaid treatment of a home depends in part on whether the applicant is married or single and whether the home’s equity exceeds the applicable limit. A spouse may be able to remain in the home while the other spouse qualifies for Medicaid, while a single applicant faces different rules. Understanding how the home is treated before applying for benefits can prevent an important asset from being misunderstood.