How Far Back Can a Nursing Home Take Your House: The 5-Year Lookback

Medicaid can look back five years (60 months) from the date you apply for long-term care coverage to find any assets you transferred for less than they were worth, including your house.¹ A house given away inside that window triggers a penalty period during which Medicaid will not pay for your nursing home care. Separately, after you die, the state must try to recover what it spent on your care from your estate, and that recovery can reach the home. So the honest answer to how far back a nursing home can take your house has two parts: five years for transfers during your life, and essentially no time limit for recovery from your estate after you die, subject to important family-member protections.

What the Five-Year Lookback Actually Reviews

When you apply for Medicaid to cover nursing home or other long-term care, the state examines your financial transactions going back 60 months from the application date.¹ Apply on March 1, 2026, and every transfer back to March 1, 2021 is fair game. Anything before that cutoff generally sits outside the window.

The lookback is not just about outright gifts. Deeding your house to a child for $1, adding a family member to the deed without receiving fair market value, or transferring the property into most kinds of trusts all count as below-value transfers. The state does not care whether you meant to qualify for Medicaid when you did it. If the numbers show you gave up something valuable and did not get equal value back, that transfer is on the ledger.

Transfers made more than five years before you need Medicaid are typically clear. That is why timing dominates long-term care planning: a house transferred six years before you enter care generally causes no problem, while the same transfer made four years out can be devastating.

How the Transfer Penalty Works

If Medicaid finds a below-value transfer inside the lookback window, it does not fine you. It delays your coverage. The penalty period equals the value of what you transferred divided by the average monthly cost of private nursing home care in your state.¹

Say you gave your daughter a house worth $200,000 three years before applying, and private nursing home care in your state averages $10,000 per month. Your penalty is 20 months. During those 20 months you are ineligible for Medicaid-covered nursing facility care, and you or your family must pay out of pocket.

The timing of the penalty is the part that hurts most. For transfers made on or after February 8, 2006, the penalty clock does not start on the transfer date. It starts on the date you would otherwise qualify for Medicaid and are living in or entering a facility.¹ The delay lands exactly when you need coverage. Before 2006, families could give assets away and let the penalty run down before applying. That option is gone.

Transfers That Do Not Trigger a Penalty

Federal law lets you transfer your home to certain people without any penalty, even inside the lookback window. Under 42 U.S.C. § 1396p(c)(2), you can transfer the house to:¹

Your spouse, with no restrictions on timing or value.
A child under 21, or a child of any age who is blind or permanently disabled. The disability generally must be recognized by the Social Security Administration.
A sibling who already has an equity interest in the home and lived in the house for at least one year immediately before you entered the nursing facility.
An adult child who lived in the home for at least two years immediately before your institutionalization and provided care that let you stay home rather than enter a facility sooner. The state decides whether the care actually met that standard.

The caretaker child exception is the one families most often try to use and the one states examine most closely. Living with a parent is not enough. The child has to show the care they gave actually delayed the parent’s need for institutional care, and medical records or physician statements are usually essential.

Three other defenses can also erase a penalty: selling the asset at fair market value (no gift, no penalty), showing the transfer was made exclusively for a purpose other than qualifying for Medicaid, or returning all the transferred assets to you.¹ The “exclusively for another purpose” defense sounds broad but is narrow in practice. A transfer made years before any health problems, with no reason to anticipate long-term care, is defensible. A transfer six months after a dementia diagnosis is not. The burden of proof is on you.

Your House Is Usually Exempt While You Are Alive

A common misconception is that Medicaid forces you to sell your home before it will pay for care. In most cases, your primary residence does not count against Medicaid’s asset limit as long as you state an intent to return, even if returning is unlikely. If your spouse, a child under 21, or a blind or permanently disabled child lives in the home, the exemption applies automatically regardless of your stated intent.

The exemption has a ceiling based on your equity. For 2026, states set that limit at either $752,000 or $1,130,000, depending on which threshold the state has adopted.² If your equity exceeds that cap and none of the qualifying family members live in the home, you become ineligible for Medicaid-covered nursing facility services until you bring the equity down, sometimes through a reverse mortgage or home equity loan.¹ When a spouse lives in the home, it is exempt with no equity cap at all.

Exempt does not mean permanently safe. The house is protected from being counted against you during your lifetime. It remains exposed to estate recovery after your death, and in some situations to a lien even before then.

TEFRA Liens

Under rules dating to the Tax Equity and Fiscal Responsibility Act of 1982, states may place a “TEFRA lien” on the real property of a Medicaid recipient who is permanently institutionalized and not expected to return home.³ Before doing so, the state must formally find that the recipient is permanently institutionalized and give the recipient a chance for a hearing to challenge that finding. The lien cannot be placed at all if a spouse, a child under 21, a blind or permanently disabled child of any age, or a sibling with an equity interest who has lived in the home for at least a year before admission is living there.

A TEFRA lien does not force a sale. It attaches to the property so the state can recover its costs if the home is later sold or transferred. If the recipient does return home, the state must dissolve the lien.³ The lien amount is capped at what Medicaid actually paid for the recipient’s care.

Estate Recovery After Death

The biggest threat to the family home is not the lookback penalty and not a TEFRA lien. It is Medicaid Estate Recovery. Federal law requires every state to seek reimbursement from the estate of a deceased Medicaid recipient who was 55 or older when they received benefits. Recovery covers nursing facility services, home and community-based services, and related hospital and prescription drug costs.¹ States can expand recovery to cover all Medicaid-funded services, and many do.

How much the state can reach depends on how the state defines “estate.” Roughly half of all states limit recovery to the probate estate, meaning assets that pass through the will or intestate succession. In those states, property held in joint tenancy, assets with beneficiary designations, and property in a trust may avoid recovery entirely. The other half use an expanded definition that includes non-probate assets the deceased had a legal interest in at death, which gives the state a much longer reach.⁴

Recovery is barred while certain family members survive the recipient. The state cannot recover from the estate if the deceased is survived by a spouse, a child under 21, or a blind or permanently disabled child of any age.⁴ Once those protections lapse, the claim becomes active.

Hardship Waivers and Disputes

When recovery or a lien would cause severe consequences for surviving family, federal law requires states to have a process for granting undue hardship waivers.¹ Federal guidance suggests special consideration when the property is the sole income-producing asset of survivors (such as a family farm), when the home is of modest value, or when other compelling circumstances exist. Waivers may also apply when enforcement would leave a family member homeless or affect a home occupied by a minor, disabled, or elderly dependent.

Applying takes documentation: financial records, proof of residency, evidence of the hardship, and a written request to the state Medicaid agency. If the waiver is denied, you can request an administrative hearing. Criteria vary substantially from state to state.

If you believe a lien or recovery claim is invalid, you have the right to challenge it. The process usually starts with an administrative appeal filed with the state Medicaid agency. Common grounds include that a family-member exemption applies, that a TEFRA lien was placed without the required hearing, or that a hardship waiver should have been granted. If the administrative decision does not resolve things, you can pursue the matter in court.

Planning Around the House

Two strategies dominate Medicaid planning for the home: life estates and irrevocable trusts. Each can work. Each carries risks that are easy to underestimate.

Life Estates

A life estate lets you deed the house to someone else, usually your children, while keeping the legal right to live there for the rest of your life. At your death, full ownership passes to the remainderperson automatically, outside probate. Medicaid treats the creation of a life estate as a partial transfer, though. The value of the remainder interest is calculated from actuarial tables based on your age, and that value is treated as a gift.⁵ If the gift falls inside the lookback window, a penalty applies on that remainder value.

Practical wrinkle: if the house has to be sold while you are alive, everyone on the deed has to agree. Medicaid also treats the sale proceeds as a partial transfer unless your share matches the actuarial value of your life estate.

Medicaid Asset Protection Trusts

A Medicaid Asset Protection Trust (MAPT) is an irrevocable trust that holds the home outside your countable estate. Because it is irrevocable, you give up control. You cannot sell the home, take it back, or change the terms. A trustee you name manages the property under the trust’s instructions.

The five-year lookback applies to assets placed in the trust. Fund it today and apply for Medicaid inside 60 months, and the transfer is treated like any other below-value gift, with the resulting penalty. Fund it six years before you need care, and it generally works. Timing is everything.

Tax Basis

Any strategy for protecting the home creates tax consequences. If you give the house away outright during your lifetime, the recipient takes your original cost basis. Bought the home for $50,000, worth $300,000 today, and your child inherits that $50,000 basis and owes capital gains on $250,000 when they sell. If the home passes through your estate at death instead, the basis resets to fair market value on the date of death, potentially wiping out the gain. Medicaid planning and tax planning often pull in opposite directions, and getting both right usually needs a tax advisor working alongside an elder law attorney.

1
Office of the Law Revision Counsel. 42 U.S. Code 1396p – Liens, Adjustments and Recoveries, and Transfers of Assets
2
Centers for Medicare & Medicaid Services. 2026 SSI and Spousal Impoverishment Standards
3
Office of the Assistant Secretary for Planning and Evaluation. Medicaid Liens
4
Centers for Medicare & Medicaid Services. Estate Recovery
5
Social Security Administration. Life Estate and Remainder Interest Tables