Nursing home bills can climb faster than almost any other household expense, and for families with a $100,000 IRA sitting inside a trust, the fear is simple: will long-term care wipe out that nest egg. The reality is more nuanced. A facility cannot simply “grab” an IRA, but Medicaid rules, trust design and timing can still put that money at risk if you are not careful.
To understand how safe a $100,000 IRA really is, you have to separate two issues that often get blurred together. One is whether a nursing home can directly seize accounts, and the other is how Medicaid treats those same assets when you apply for help with long-term care costs. The second question, not the first, is usually where families run into trouble.
What a nursing home can and cannot do to your IRA
From a legal standpoint, a private nursing facility does not have a special power to reach into an IRA or brokerage account and empty it. As one analysis of a case involving $260 and an IRA put it, a nursing home cannot directly seize funds held in an individual retirement account. What the facility can do is require you to pay your bill, and if you do not, it can pursue ordinary collection remedies, including lawsuits and liens, just like any other creditor.
The real pressure point is that long-term care is so expensive that most people cannot pay out of pocket indefinitely, so they eventually look to Medicaid. At that stage, the question shifts from “can the nursing home take my IRA” to “will Medicaid treat my IRA as an available asset that must be spent down.” In the same My Mother Has scenario, the focus quickly turns to how to use the IRA strategically while working toward Medicaid eligibility, not to any special seizure power by the facility itself.
Medicaid limits, IRAs and the “look-back” trap
Medicaid is designed as a safety net, so it imposes strict financial limits before it will pay for long-term care. For Nursing Home Medicaid, the 2026 asset limits in most states are $2,000 for an individual and either $3,000 or slightly higher for a couple, which means a $100,000 IRA is far above the threshold. Separate income rules also apply, and guidance on ABD Medicaid income and related programs underscores that applicants must fit within both income and resource caps before benefits begin.
On top of those limits, Medicaid uses a “look-back” period to police last-minute transfers. Legal overviews of the Medicaid, Look Back rules explain that, in order to apply for long-term care coverage, you must disclose transfers made during a multi-year window, and gifts or below-market transfers can trigger penalties. A separate summary of Medicaid, Look, Back notes that applicants have to meet an asset limit to qualify for Medicaid long-term care and that improper transfers during the look-back can lead to a period of ineligibility based on the value of the violating assets. In practice, that means shifting a $100,000 IRA into a trust shortly before applying can backfire if it is viewed as an attempt to sidestep these rules.
Does putting the IRA in a trust actually protect it?
Whether a trust shields your IRA depends almost entirely on the type of trust and who controls it. A common estate planning tool, the revocable living trust, is attractive because it lets you avoid probate and keep control of your assets, but legal guidance on Living Trust Protect is blunt that a revocable living trust will not protect your assets from a nursing home. A separate estate-planning analysis reinforces that the short answer is no, a revocable trust generally does not shield your assets from nursing home costs, Unlike an irrevocable structure where you give up control.
By contrast, an irrevocable Medicaid asset protection trust can, if set up correctly and early enough, move assets outside your countable estate. One discussion of Protecting a Million IRA From Medicaid notes that an irrevocable Medicaid asset protection trust is one technique that may help people with assets exceeding Medicaid’s limits reduce their countable resources. Another elder law overview explains that Once assets are transferred into an irrevocable trust and the five-year lookback window has passed, those assets are generally protected from nursing home costs because you no longer own them. A related description of a Five, Year Trust, also called a Legacy Trust or Medicaid Asset Protection Trust, underscores that protection typically kicks in only after a five year look back period, which is why timing is critical.
How Medicaid treats IRAs, annuities and Roth accounts
Even if a nursing home cannot directly seize your IRA, Medicaid may still count it as an available resource. Federal guidance summarized in a piece on IRA Assets Protected notes that the federal government does not give IRAs blanket protection from long-term care costs, and states can treat them differently depending on whether they are in payout status. One elder law explainer on Nov, Can, IRA, points out that, to qualify for Medicaid, not only must your assets be under the limit, but in many states an IRA that is not being annuitized or paid out can be treated as a countable resource that must be spent down, even if tapping it triggers a tax penalty. Another practitioner summary notes that if an Apr, IRA, Medicaid is in payout status, depending on your state, it may not count as an available asset for Medicaid eligibility, but the income stream will still be counted.
Other products can be used to reshape how Medicaid views your balance sheet. A recent advisor Q&A on long-term care planning notes that Feb, Annuities, Any, money you put into a Medicaid-compliant annuity will not count against your asset limit and will be exempt from the resource test, although the income it generates will still be considered. For savers using tax-free vehicles, a separate discussion of a Jun, Roth IRA emphasizes that nursing homes cannot access your savings accounts directly, but Medicaid can still look at Roth balances when assessing eligibility. Another case study on whether a facility will take a $450 IRA and a house to cover costs reiterates that a nursing home cannot take your savings, home or other assets outright, but Medicaid rules may require you to spend down or reposition those resources before coverage begins.
State-specific rules, special trusts and why advice matters
Long-term care planning is also shaped by state-level rules that are shifting again. In California, for example, guidance on the Aug, Brief History, changes explains that Medi Cal asset limits for older adults and individuals with disabilities are being reinstated after a period of expansion, and that some groups will again be subject to much lower limits. A separate statewide FAQ on Nov, Asset Limit notes that, as of Effective January 1, 2026, the asset limit will be reinstated for non-MAGI Medi-Cal, and that in 2025 it is $157,920, underscoring how quickly the eligibility landscape can change. Broader overviews of Feb, She, The Medicaid trusts caution that people must be mindful of the Medicaid look-back period and the tradeoff between protecting assets and giving up the ability to access them.
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*This article was researched with the help of AI, with human editors creating the final content.
Cole Whitaker focuses on the fundamentals of money management, helping readers make smarter decisions around income, spending, saving, and long-term financial stability. His writing emphasizes clarity, discipline, and practical systems that work in real life. At The Daily Overview, Cole breaks down personal finance topics into straightforward guidance readers can apply immediately.
