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is a life estate deed a good way to protect your house from medicaid using a life estate deed is a common practice that's sometimes employed to protect the house for medicaid the idea being that the person who is receiving the life estate or what's called the possessory tenant has a right to live in that property as long as they live without having an ownership interest in the property you typically see this in circumstances where a parent decides to leave the house to their children and reserve the life estate for themselves so that the kids now own the home but they get to live in it the effect on the children is they own the house but they can't sell it without the consent of the person who reserves the life estate there are problems with that however when you do that the children who now have inherited that house as a result of the transfer do not get a step up in basis when you pass away so simply speaking if you've owned the house for 50 years and

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