What Happens to an ADU When a Parent on the Deed Goes into a Nursing Home in Massachusetts?

By Buz Artiano, BuildX | May 2026

Watch: ADUs, Nursing Homes & Inheritance: What Families Get Wrong | Atty. Brian Barreira

As soon as a parent's health starts declining, everything starts to get more complicated. If your parent is on the deed to your property because you built an ADU together, you need to know what happens to the house if they end up in a nursing home. A lot of people are afraid of MassHealth taking the property, making them sell it, or place a lien on it. Unfortunately that is possible, and people are right to be cautious. But there's more to the whole thing than most people realize.

My name is Buz Artiano, and I am the founder of BuildX. Since we started, we've built dozens of ADUs all over Massachusetts, but most of our builds have been around the South Shore and Plymouth County areas. Because we handle all the design, permitting, and construction, we walk people through the legal and financial planning that has to happen when building an ADU. That includes things like septic constraints, your town's zoning requirements, and the estate planning conversations that most builders never even bring up. But we hear this question a lot, in just about every family project where a parent goes on the deed.

In this article we will explain to you exactly what happens when a parent on your deed has to go into a nursing home in Massachusetts. We'll tell you what MassHealth can and cannot do to your property, and what everyone needs to understand before anything like that ever happens. The legal framework can give you a lot of protection, more than most people think, but only if it's all set up correctly from the start.

What Can MassHealth Actually Do to Your Property?

When a parent enters a nursing home and applies for MassHealth (Massachusetts Medicaid) to cover the cost of care, MassHealth looks over all of their assets and financial records. If the parent is on the deed to the property where the ADU sits, MassHealth can put a notification lien on their share of the property. They're not seizing the property or forcing you to sell it, it's just a kind of flag that says if this property is sold while the parent is alive, MassHealth is entitled to recover its costs from the sale money of the home.

But keep in mind, the lien only applies to the parent's share of the property. If three names are on the deed, then MassHealth's can only collect up to one-third of the sale proceeds, not the entire thing. The other two people's part of the money are not affected at all.

Here's the part that changes everything though. Under current Massachusetts law, those notification liens expire when the parent dies. The Massachusetts Supreme Judicial Court has affirmed this. MassHealth argued for decades that liens should still be able to be collected on even after the parents dies, but the SJC ruled that that is not the case. As long as the family doesn't sell or transfer the property while the parent is alive, the lien just goes away when the parent dies, and the family owns it in full.

This applies whether one parent or both parents are in a nursing home. If both parents are on the deed and they both have to go to a nursing home, there could be 2 separate liens on the property. Both liens expire at death under the same SJC ruling, as long as the property stays in the family.

What Are the MassHealth Asset Limits Families Need to Know?

Before MassHealth will cover nursing home costs, the applicant has to meet certain asset limits. Someone who is applying for MassHealth can only have $2,000 in countable assets. If they have a spouse who isn't going into the nursing home, they can have up to $158,000 in countable assets. All families have to plan around these numbers. For current details, visit mass.gov.

The property itself is not usually considered a countable asset if the spouse or another family member is living in it. This is important because MassHealth doesn't force people out of their home. So what they do is put the notification lien on the part of the property that the parent in the nursing home owns, which basically means the family can't sell the property and keep the parent's part of the money without paying off MassHealth first.

Here's how all this affects families with ADUs. The lien exists on paper, but it doesn't really change anything in day to day life. The family just stays living in the home. The ADU continues to serve its purpose, and nobody has to move. The lien only becomes an issue if the family tries to sell the property while the parent is still alive, or if the law changes.

Why Does the Deed Structure Matter So Much?

The outcome of the nursing home scenario all depends on how the property ownership was structured before the parent went into a nursing home. If they were added to the deed correctly, as a joint owner who got a transfer for value (basically they contributed financially to the ADU in exchange for part ownership), then the property is protected from MassHealth's five-year look-back rule on gifts.

We see this whole scenario on just about every ADU project. When a parent pays $400,000 to build an ADU that makes the property worth $1.2 million after it's all built, we set it up as one-third ownership of the property so there's no "gift". The parent got value for the money they put in. That's very different from adding a parent to the deed as a favor or for convenience. A transfer for value is never a problem under Medicaid rules. But if it's a gift it's going to be subject to the five-year look-back, and if the parent goes into a nursing home during that time, MassHealth will say that the gift of the property disqualifies them from getting coverage. We always walk everybody through this before construction starts, because getting the deed wrong at the beginning creates a problem that absolutely cannot be fixed later.

Joint ownership, structured as a shared investment, is the best way to do things as long as family relationships are stable and everyone is on the same page. The parent gets equity for the money they invested into the ADU, and the children's ownership share is unaffected. And if MassHealth eventually enters the picture, they can only ever collect on the parents part of the property.

What Happens If the Family Is Forced to Sell While the Parent Is in a Nursing Home?

If a family is forced to sell the home while the parent is still alive and the MassHealth lien is active, the state will absolutely take their share of the money. On a property with three names on the deed and the parent owns one third, MassHealth would only be entitled to up to one-third of the net sale price.

You're very limited on what you can do when that happens. Depending on the situation, the parent might be able to transfer their part to a spouse or take other legal steps to get rid of the lien before the house has to be sold. But situations like this need experienced attorneys who specialize in Medicaid law and real estate. At the end of the day a forced sale is the worst-case scenario, and it's usually totally avoidable. Families who just hold on to the property and don't sell it are protected by the SJC ruling. The lien disappears when the parent dies, and the rest of the family keeps the property free and clear.

Can MassHealth Change the Rules After the Deed Is Already Done?

This is the question every attorney and every family asks. The honest answer is yes, the rules can always change. MassHealth's own lawyers have changed their interpretation of the existing rules multiple times over the past three decades. They argued for years that notification liens expired at death, then they changed their minds and claimed they always believed they didn't, so the SJC had to settle the matter.

What families can control is setting up the ownership structure correctly under current law. A transfer for value, documented properly, is protected under the rules as they exist today. If the law changes in the future, retroactive enforcement is possible but historically rare. The legal principle of grandfathering generally protects transactions completed under prior rules, although this protection is stronger for purchases (transfers for value) than for gifts.

All we're trying to say is do not wait. If you are planning an ADU with a parent, get the deed structure right now. The longer you wait, the closer you get to the window where a health event forces decisions under pressure rather than planning.

Is the Joint Deed Approach Right for Every Family?

Not necessarily. Joint ownership can work really well when everyone gets along, agrees on what the ADU is for, and the money each person puts in is clearly tracked and fair. But that's not every family. If things are more complicated, like blended families, strained relationships, or situations where what someone pays doesn't neatly match a percentage of ownership, you might need a completely different setup.

Alternatives include a lien or note arrangement (where the parent's investment is secured by a written agreement rather than a deed interest), a life estate (which grants the parent the right to live in the ADU regardless of who owns the property), or in limited cases, a trust. Each has tradeoffs. A lien is simpler but provides less control. A life estate protects residency but complicates future sales. Trusts add legal cost and complexity that may not be justified for most families.

We are a design-build company, not a law firm. We strongly recommend that every family consult with an elder law attorney who understands both Medicaid planning and ADU-specific ownership structures. The parent and the children should each have separate lawyers to make sure everyone's interests are protected. We can help you build the ADU. The legal structure needs to be handled by someone whose sole job is protecting your family's assets.

Your ADU Should Protect Your Family, Not Put It at Risk

The fear that MassHealth will take the family home is one of the most common reasons families hesitate to build an ADU for an aging parent. Under current Massachusetts law, the protection is stronger than most people realize, but only if the ownership structure is set up correctly before a health event occurs. The SJC ruling on lien expiration at death, combined with a properly structured transfer for value, means that families who plan ahead can build with confidence.