One of the most common questions we hear is:
“What happens to my house and my money if I have to go into a nursing home?”
The short answer is: It depends on whether you plan ahead. Without planning, long-term care costs can quickly drain a lifetime of savings. But with proper planning, many people can protect a significant portion of their assets.
This article explains how it works in Maine.
The Cost of Nursing Home Care in Maine
Nursing home care in Maine is expensive. The average cost is often $10,000–$14,000 per month, and in some facilities, it can be even higher.
Most families cannot afford to pay privately for very long. After savings are spent down, many people apply for MaineCare (Medicaid) to help cover nursing home costs.
But to qualify for MaineCare, there are strict financial rules, and understanding those rules is an important part of long-term care planning, especially for married couples. You can read more about that here:
https://aginginmaine.com/spousal-long-term-care-mainecare-planning/
What Happens to Your Money?
If you enter a nursing home and apply for MaineCare, you are generally allowed to keep only a small amount of assets.
Typically, a single person may keep:
- About $10,000 in countable assets (this number can change)
- Personal belongings
- One vehicle
- Certain prepaid funeral arrangements
Most other assets must be spent down before MaineCare will start paying for care.
Countable Assets Usually Include:
- Bank accounts
- Investments
- Retirement accounts (sometimes)
- Extra real estate
- Cash value life insurance
Many families are surprised to learn that giving money away to qualify for MaineCare can create a penalty if not done properly. If you are considering gifting, it is important to understand the rules before making any transfers:
https://aginginmaine.com/gifting-money-before-mainecare/
What Happens to Your House?
Your home is treated differently than your money.
In many cases, you can keep your home while you are alive, especially if:
- You intend to return home, or
- Your spouse lives there, or
- A disabled child lives there
However, after you pass away, the State of Maine may seek repayment through a process called Estate Recovery.
This means the state may place a claim against your home to recover what MaineCare paid for your care. This is why planning ahead is so important, particularly for married couples trying to protect assets for the spouse at home:
https://aginginmaine.com/spousal-long-term-care-mainecare-planning/
What Happens If You Are Married?
The rules are different for married couples.
When one spouse goes into a nursing home:
- The spouse at home is called the “community spouse.”
The Community Spouse Is Allowed to Keep:
- The home
- A vehicle
- A significant portion of the couple’s assets
- Part of the nursing home spouse’s income
These rules are designed to prevent the spouse at home from becoming impoverished. Proper planning can often protect a large portion of assets for the healthy spouse. You can learn more about how this works here:
https://aginginmaine.com/spousal-long-term-care-mainecare-planning/
Can You Protect Your Assets?
Yes — but planning must be done early.
Common Planning Strategies Include:
- Irrevocable trusts
- Gifting strategies
- Medicaid-compliant annuities
- Spending down on exempt assets
- Caregiver agreements
- Promissory notes (in some cases)
However, MaineCare has a 5-year lookback period, which means gifts or transfers made within 5 years of applying may cause a penalty period during which MaineCare will not pay for care. You can read a detailed explanation of the lookback period here:
https://aginginmaine.com/mainecare-5-year-lookback-explained/
This is why families should plan before a crisis happens.
The Biggest Mistake Families Make
The biggest mistake we see is waiting too long.
Many families only look for help after someone is already in a nursing home. At that point, options are more limited, but there are often still strategies available depending on the situation.
The earlier you plan, the more you can usually protect.
Final Thoughts
If you or a loved one may need nursing home care in the future, the most important thing you can do is understand your options and plan ahead.
Long-term care planning and MaineCare planning are complicated, and every family’s situation is different. Getting advice early can make a significant difference in what you are able to protect and pass on to your family.
Take the First Step
If you are concerned about nursing home costs, MaineCare, or protecting your assets, we can help. Planning ahead can make a significant difference in what you are able to protect for yourself and your family.
Contact our office today to schedule a consultation and start planning for the future.
Call us at (207) 848-5600 or contact us through our website to get started.
