Protecting the Family Home from Nursing Home Costs in North Carolina
Legal Strategies Every North Carolina Family Should Know Before It's Too Late
For many North Carolina families, the home is more than just a roof over their heads. It’s the place where generations have gathered for holidays, where children took their first steps, and where stories have been passed down over the years. It’s no wonder that one of the greatest fears families express when facing long-term care decisions is losing that home to nursing home costs. In my work with families across the state, this is a concern I hear often; and it’s a valid one. Without proper planning, the family home may be at risk. But with the right legal strategies in place, it doesn’t have to be.
A Daughter's Worry: Carla and Evelyn’s Story
Carla always knew her mother Evelyn was fiercely independent. Even after Evelyn became a widow in her 60s, she maintained her home on her own: mowing the lawn, tending the garden, and baking her famous pound cake every Sunday.
But now at 76, Evelyn’s memory was slipping. The stove had been left on more than once. A neighbor had called Carla when Evelyn was found wandering two blocks away, confused. It became clear Evelyn would eventually need more care than Carla could provide at home. When a social worker mentioned that Medicaid might help cover a nursing home, Carla felt both relief and panic.
“Wait… will they take Mom’s house?” she asked. She had heard stories of families losing everything to nursing home bills. The thought of losing the home her parents worked their whole lives to pay off was unbearable.
Carla needed answers, and fast.
The Hidden Risk: Medicaid and the Family Home in North Carolina
Carla’s concerns weren’t unfounded. In North Carolina, Medicaid can help pay for long-term care in a skilled nursing facility. But, eligibility comes with strict asset and income limits. One common misconception is that “they can’t take your house,” but the truth is more complicated.
Here’s how it works:
Is the Home Protected While You’re Alive?
Yes. In most cases, your primary residence is exempt when applying for Medicaid in North Carolina if your equity interest is under $713,000 (as of 2024) and you intend to return home or have a qualifying relative living there (like a spouse or dependent child).
But here’s the catch: once the Medicaid recipient passes away, the state may seek to recover the cost of care from their estate, including the home. This is known as Medicaid Estate Recovery.
That’s where families like Carla’s get caught off guard. They assume the house is safe, but years after Mom passes, a letter arrives from the Department of Health and Human Services, notifying them of a Medicaid claim against the estate.
Planning Ahead: Strategies to Protect the Family Home
The good news? You don’t have to wait for that letter to start protecting the home. Elder law planning can safeguard the property. But, timing is everything. Here are a few tools we use with clients in North Carolina:
1. Lady Bird Deed (Enhanced Life Estate Deed)
A uniquely powerful tool available in North Carolina, the Lady Bird Deed allows someone to:
Keep full control of the property during their lifetime,
Avoid triggering the Medicaid look-back period,
And transfer the property automatically to beneficiaries at death—outside of probate and beyond Medicaid recovery.
It’s not subject to estate recovery because the home doesn’t pass through the probate estate. And better yet, it lets the owner change their mind at any time.
Caution: Not all attorneys are familiar with Lady Bird Deeds. It must be drafted correctly to ensure full protection.
2. Medicaid Asset Protection Trust (MAPT)
If there’s more time to plan (ideally at least 5 years before needing care), a MAPT can be a powerful strategy:
The home is transferred into an irrevocable trust.
The parent no longer legally owns the home—but may retain rights to live there.
After 5 years, the home is fully protected from nursing home spend-down and estate recovery.
This strategy requires giving up control, so it’s not for everyone. But for families planning ahead, it can be the safest route.
3. Avoiding Common Mistakes: Gifting the Home Outright
Some families think they can simply add their children to the deed or transfer the home as a gift to avoid Medicaid. That often backfires. Here’s why:
It triggers the 5-year look-back period and can result in Medicaid ineligibility.
It may expose the home to capital gains tax when sold.
The property may become subject to the child’s creditors, divorce, or lawsuits.
Transferring ownership without understanding the consequences can do more harm than good.
Evelyn’s Plan: A Happy Ending
Carla consulted with a North Carolina elder law attorney, someone who understood both Medicaid rules and the emotional weight of protecting family history. Together, they put a Lady Bird Deed in place, ensuring Evelyn’s home would stay in the family even if nursing home care was needed.
When Evelyn eventually transitioned into long-term care, Carla was able to focus on making her mother comfortable, not worrying about losing the house. And when Evelyn passed, the home passed directly to Carla and her brother—no probate, no Medicaid recovery.
The house, and their memories, were safe.
Let’s Protect What Matters Most
If you’re caring for an aging parent in North Carolina, or if you’re thinking about your own future, it’s never too early (or too late) to start planning. Protecting your family’s home doesn’t happen automatically, but with the right guidance, it’s possible.
As The Happy Lawyer, I help families across Wake County and beyond develop smart, compassionate legal plans that preserve what matters most. Whether you’re exploring Lady Bird Deeds, Medicaid planning, or simply wondering where to start, let’s talk.
👉 Call (919) 336-4219 or schedule a free Discovery Call today.
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