How To Protect Your Family Home From Medicaid Recovery

For most Maryland families, the home is more than an asset — it’s the heart of your legacy. It’s where memories are made, where children grow up, and where generations are connected.

But many families are shocked to learn that the state can sometimes claim part or all of that home to recover Medicaid costs after a loved one passes away.

The good news? With proper planning, you can protect your home — and ensure it stays in your family.

Understanding Medicaid Estate Recovery in Maryland

When someone receives long-term care through Maryland Medicaid, the state keeps track of those costs.

After the recipient passes away, Maryland can attempt to recover those expenses from their estate — often by placing a claim or lien against their property.

This is called Medicaid Estate Recovery.

Here’s how it usually works:

• If the person who received Medicaid owned a home in their name alone, that property becomes part of their estate.
• When the estate goes through probate, the state can make a claim for repayment of Medicaid benefits.
• In some cases, the home must be sold to pay the debt — even if family members still live there.

Without planning ahead, your family home could be at risk.

Who Is Affected

Medicaid recovery typically applies when someone received nursing home care or long-term care services.

Even if your loved one was allowed to stay in their home while receiving Medicaid benefits, the home can still be targeted for repayment later.

Common scenarios include:

• An aging parent receives long-term care and passes away, leaving the home in their name.
• Children are forced to sell the home to pay Medicaid recovery costs.

These situations happen far too often — and they’re almost always preventable.

Ways to Protect Your Maryland Home

There are several strategies that can help safeguard your property, depending on your goals and timing.

1. Transfer the Home into a Life Estate Deed

A life estate deed allows you to retain the right to live in your home for the rest of your life while naming who will inherit it when you pass.

In Maryland, this tool can sometimes keep your property out of the probate process — and out of reach of Medicaid recovery.

However, it must be carefully drafted to comply with state law and avoid triggering gift penalties. Special consideration should also be given to capital gain tax implications.

2. Use an Asset Protection Trust

This is a specialized type of irrevocable trust designed to protect assets — like your home — while still allowing you to qualify for Medicaid down the road.

The key is timing.
Maryland has a five-year “lookback” period for Medicaid eligibility, meaning transfers must be made at least five years before applying for benefits.

An Asset Protection Trust can be one of the most effective tools for long-term protection when set up early.

3. Update Your Estate Plan Regularly

If your will or trust doesn’t specifically address your home and potential Medicaid recovery, your family could be left vulnerable.

Make sure your estate planning attorney in Maryland reviews your documents for:

• Correct property titling
• Clear beneficiary designations
• Coordination with Medicaid eligibility and tax goals

Even small oversights can make a big difference.

What Not to Do

In an effort to protect their home, some families transfer property too quickly or without guidance. That can backfire.

Avoid these common mistakes:

• Gifting your home outright to children — this can trigger capital gains taxes and Medicaid ineligibility.
• Adding children to your deed — this exposes your property to their creditors or divorces.
• Relying on online forms — Maryland’s laws are specific, and one error could undo your protections.

When it comes to your home, “DIY” estate planning is rarely worth the risk.

How Liberty Legacy Law Group Helps

At Liberty Legacy Law Group, we help Maryland families protect their homes and their peace of mind.

Our approach includes:

• Reviewing your current deed and estate plan
• Designing a strategy that fits your family’s financial and healthcare needs
• Coordinating with financial advisors and elder care specialists
• Helping you take proactive steps before it’s too late

We believe every Maryland family deserves the chance to keep their home in the family — not in the hands of the state.

Final Thoughts

Your home represents stability, history, and love. It shouldn’t become a casualty of complex Medicaid laws.

The sooner you plan, the more options you have to protect what matters most.

At Liberty Legacy Law Group, we help Maryland families understand their choices and take action — so their homes stay where they belong: in the family.

Because your home isn’t just property. It’s your legacy. Reach out to our team today.