North Carolina Medicaid Planning: How to Safeguard Your Parent’s Home and Savings

Legal Strategies to Protect a Parent’s Savings

If you’re like many of my clients, you may be caring for an aging parent or beginning to see signs that a loved one needs more help than they used to. It’s a tough place to be. You’re juggling your own responsibilities while trying to make the best decisions for someone you love. One of the hardest parts? Figuring out how to pay for long-term care without draining a lifetime of savings or putting the family home at risk. Learn more about North Carolina Medicaid planning.

Ellen’s Story

When Ellen’s mother fell and broke her hip, everything changed overnight. The hospital stay quickly turned into a rehab stint, and then a long-term care conversation that no one in the family had planned for. Ellen, the oldest of three siblings and a mother of two herself, found herself thrust into the role of caregiver and decision-maker.

Her brother insisted their mom should just move in with him—“It’s cheaper that way,” he argued. Her sister wanted to hire private care but had no idea how they’d afford it. Ellen, juggling her own household, work, and kids’ schedules, felt the pressure closing in. There were savings—but how long would they last? And what about protecting the family home?

Caregiving Without Going Broke

This situation is all too common. Millions of families across North Carolina find themselves scrambling to make expensive care decisions with little warning.  And, sometimes with even less legal guidance.

If you’re caring for an aging parent, you may be asking:

• How do we pay for nursing home care without draining everything Mom worked for?

• Will Medicaid take the house?

• What happens if my siblings and I don’t agree?

The good news: there are legal strategies available in North Carolina that can protect your parent’s life savings—and their dignity—if you act early enough.

Practical Steps You Can Take

In this blog, I’ll walk you through practical, compassionate steps families can take to protect assets, reduce stress, and create a clear caregiving plan that doesn’t leave anyone financially devastated. I’ll also share how a few timely decisions—like the ones Ellen eventually made—can make all the difference.

Let’s talk about how you can avoid financial burnout while making sure your parent receives the care they need. Because caregiving shouldn’t come at the cost of your future—or theirs.

The High Cost of Care—and the Clock That’s Ticking

After a few weeks in rehab, Ellen received a call from the discharge planner: her mom wasn’t well enough to return home. The recommendation? A skilled nursing facility—with a price tag of over $7,500 per month.

The family was stunned. Her mom owned her home free and clear, had some savings, and a modest pension—but not enough to privately pay for long-term care for more than a year. Ellen’s brother said they should start “spending down” to qualify for Medicaid. Her sister panicked and suggested putting the house in her name.

Neither idea was entirely right—and both came with risks.

Medicaid’s Strict Rules

Like many adult children, Ellen didn’t know that Medicaid has strict rules about how assets are counted and transferred. In North Carolina, Medicaid for long-term care is means-tested, meaning your parent must meet certain income and asset thresholds to qualify.

And here’s the kicker: there’s a 5-year “look-back” period. That means if you transfer a home or give away assets to qualify, Medicaid will review those transactions and could impose a penalty period during which your parent is ineligible for benefits—even if they need care now.

This is where working with an elder law attorney early on can make all the difference.

What Ellen Didn’t Know—But Needed To

After a consultation with an elder law attorney (someone like me), Ellen learned that her mom’s situation wasn’t hopeless. In fact, there were legal, ethical strategies that could:

• Protect the home from a Medicaid estate recovery claim;

• Preserve some assets while still qualifying for Medicaid; and

• Create peace among the siblings by clarifying roles and responsibilities.

Key Strategies

Let’s walk through the key strategies Ellen used—and that you might want to consider too.

1. Understanding Countable vs. Non-Countable Assets

In North Carolina, not all assets are treated equally by Medicaid:

• Countable assets: cash, investment accounts, retirement savings, second homes.

• Non-countable assets (in some cases): the primary residence (up to a certain equity limit), personal belongings, one vehicle, and prepaid burial arrangements.

Ellen’s mom’s home, under the right circumstances, could be protected—but it required careful planning.

2. Using a Lady Bird Deed to Preserve the Home

One of the most powerful tools available in North Carolina is the Lady Bird Deed (also called an enhanced life estate deed). This deed allows your parent to:

• Retain full control of the home during their lifetime;

• Avoid probate upon death; and

• Pass the home to a named beneficiary without triggering Medicaid payback.

It’s simple, affordable, and often overlooked. Ellen was relieved to learn that her mom could keep her home out of the state’s reach—while still applying for Medicaid.

3. Spend-Down Strategies That Make Sense

To meet Medicaid’s asset limits, Ellen worked with her attorney to use spend-down strategies that didn’t waste money. Instead of giving assets away or letting them sit:

• They prepaid for funeral arrangements, which Medicaid allows.

• Purchased a new, Medicaid-exempt vehicle in her mom’s name.

• Made essential home repairs to improve safety and meet Medicaid guidelines.

These smart choices helped her mother reach Medicaid eligibility without draining funds unnecessarily.

4. Establishing a Caregiver Agreement

Ellen had been helping with appointments, groceries, and financial decisions for months—but hadn’t been compensated. With the attorney’s guidance, she and her siblings agreed to create a caregiver agreement, a legal contract where Ellen would be paid a reasonable wage for her time.

This not only helped reduce countable assets (a legitimate Medicaid spend-down), it also prevented family friction. Everyone was clear on roles, expectations, and financial arrangements.

5. Durable Power of Attorney: The Unsung Hero

Another game-changer for Ellen? Her mom had previously named her as agent under a Durable Power of Attorney. However, her Durable Power of Attorney contained the right language to allow Medicaid planning actions like asset transfers and trust creation.

Too often, families come to me with outdated or boilerplate POAs that don’t allow these actions—leaving them stuck in crisis mode.

If you’re in the early stages of planning for a parent’s care, this is one of the most important documents to update.

Ellen’s Outcome—and What It Means for You

With a plan in place, Ellen could finally breathe. Her mother moved into a high-quality skilled care facility, paid for by Medicaid. The home was preserved for the next generation through a Lady Bird Deed. Family tensions eased once roles were clearly defined and the financial plan was transparent. And Ellen no longer had to carry the weight of caregiving alone.

She didn’t do it by guessing. She didn’t rely on Google. She reached out for the kind of guidance that protects not just money—but peace of mind.

And now you can too.

Don’t Wait for a Crisis

Here’s the truth: the earlier you plan, the more options you have. Once your parent is in crisis—hospitalized, out of funds, or cognitively impaired—the window for many legal strategies narrows or even disappears.

But with the right tools in place, you can:

• Avoid unnecessary financial loss;

• Prevent family conflict;

• Preserve your parent’s dignity;

• And protect the home and savings they worked so hard for.

This isn’t about beating the system—it’s about using the system wisely and legally to protect the people you love.

Let’s Talk Before It’s Too Late

If you’re caring for a parent,or see the need on the horizon, let’s talk. As an elder law attorney serving families throughout North Carolina, I help adult children like you create smart, compassionate plans that ease the financial and emotional burden of caregiving.

And, as a child of a caregiver and having a parent in a nursing home, I’ve been there. I know first hand the challenges, emotionally and financially, you may experience.

I’ll walk you through your options, explain what Medicaid really requires, and help you take proactive steps that safeguard your parent’s assets and your own peace of mind.

The earlier you start, the more we can do together.

Schedule a free Discovery Call to learn more about how we can help.

Or, if you’re ready to get started planning for Medicaid, schedule a more in depth Elder Law Consultation.

You don’t have to do this alone. Let me walk with you through this journey.