Can Medicaid Take Your House In Michigan?

Michigan Medicaid law distinguishes between exempt and non-exempt assets. In most cases, your primary residence is classified as an exempt asset, which means it is not counted against you when determining Medicaid eligibility. Medicaid generally does not require you to sell your home or transfer it away in order to qualify for coverage.

Other exempt assets include one vehicle, personal belongings, a prepaid irrevocable funeral contract, life insurance with a combined face value of $1,500 or less, and up to $9,950 in cash or other countable assets. Non-exempt assets generally must be spent down before Medicaid eligibility can be established.

There is an important exception worth knowing: for long-term care Medicaid in Michigan, the home exemption does not apply when home equity exceeds $752,000 as of 2026. Exceptions to that limit exist when a spouse, a child under 21, or a blind or disabled child lives in the home. The specifics of how this applies to any individual situation depend on the details of that case.

The information in this blog is general in nature and is not a substitute for personalized legal advice. Michigan Medicaid law is complex and changes regularly. Contact the Law Office of David Waterstradt directly to discuss your specific situation before taking any action.

What Medicaid Can Do After Death: Estate Recovery

While Medicaid generally cannot force the sale of your home during your lifetime to establish eligibility, the full answer to this blog's title does not end there. Michigan has a Medicaid Estate Recovery Program. After a Medicaid recipient passes away, the state may seek reimbursement from that person's probate estate for long-term care costs paid on their behalf. If the home passes through probate and no exemption, deferral, hardship waiver, or planning protection applies, it could be subject to that recovery process.

Certain situations allow recovery to be deferred, including when a surviving spouse, a minor child, or a blind or disabled child is living. Undue hardship provisions may also apply in specific circumstances.

This is one of the most important and frequently misunderstood aspects of Medicaid planning. The home may be safe during a person's lifetime but still exposed after death, depending on how the estate is structured. This is precisely the kind of issue a Certified Elder Law Attorney can help families address proactively.

What Happens to Non-Exempt Assets

Non-exempt assets are generally required to be spent down before a Medicaid application can be approved.

However, that does not necessarily mean families are forced to deplete everything they have saved. With proper legal guidance, there are lawful planning strategies that may help preserve more of what has been accumulated while still qualifying for coverage.

One approach involves converting non-exempt assets into exempt ones. For example, using non-exempt cash to purchase a prepaid irrevocable funeral contract converts a countable asset into an exempt one. If the home needs a new roof or furnace, using non-exempt funds to make those improvements may increase the value of an already-exempt asset rather than leaving the cash as a countable resource. Whether these approaches make sense in any specific situation depends on the details involved.

The Challenge Single Applicants Face With the Home

As a single Medicaid applicant, Michigan law limits countable assets to $9,950. That creates a practical challenge: property taxes, homeowners insurance, utilities, and maintenance costs do not stop because someone is receiving Medicaid benefits.

One planning approach that may be available to some single applicants involves gifting a portion of non-exempt assets and using the remainder to purchase a Medicaid-compliant annuity. The structure of this strategy must be carefully calculated and documented based on current policy and individual circumstances. It is not a one-size-fits-all solution and should only be considered with the direct guidance of a qualified elder law attorney who can evaluate whether it applies to a specific situation.

Additional Protections That May Be Available to Married Couples

Michigan Medicaid law provides additional protections for married applicants. A spouse who continues to live at home, referred to as the community spouse, may be permitted to keep one-half of the couple's countable assets up to a maximum of $162,660 as of 2026. That figure changes annually.

For assets that exceed what Michigan law allows the community spouse to retain, two tools may be available depending on the circumstances: a Medicaid-compliant annuity or a sole benefit trust. Either option can result in immediate Medicaid qualification for the spouse in the nursing home without further spend down. Both involve specific legal and financial requirements and must be structured correctly to be effective. Whether either option is appropriate depends entirely on the details of the individual case.

Planning Ahead with an Irrevocable Trust

For individuals whose need for nursing home care is not imminent, earlier planning may open up additional options. An irrevocable trust may allow assets to be protected if five years pass without the need to apply for Medicaid. This connects directly to Michigan's five-year look-back period, during which asset transfers are reviewed as part of the Medicaid application process.

Earlier planning almost always allows for more flexibility than planning done in a crisis. However, the right approach depends on the family's specific financial situation, health status, and long-term care goals. These decisions should not be made without professional legal guidance.

Why Working with a Certified Elder Law Attorney Matters

Michigan Medicaid rules are detailed, regularly updated, and applied differently depending on whether the applicant is single or married, the types of assets involved, and the specifics of the family situation. Errors in the planning or application process can cause delays, denials, or consequences that affect both the applicant and their family for years.



David Waterstradt is a Certified Elder Law Attorney, one of only a handful of attorneys in the state of Michigan to hold CELA certification from the National Elder Law Foundation. With over 30 years of experience in Medicaid planning and elder law in West Michigan, the guidance provided is specific to each family's situation. Whether a family is planning ahead or facing an immediate care need, the goal is always to work within the law to preserve as much as possible while securing the coverage needed.

Schedule a Medicaid Planning Consultation in Muskegon & Western Michigan Areas

The Law Office of David E. Waterstradt serves clients throughout Muskegon, Grand Rapids, Grand Haven, and Norton Shores. Contact the office today to schedule a consultation and get clear, personalized answers about what Medicaid may affect when it comes to your home and your assets.