Short Answer

In North Carolina, if Medicaid is not available, families typically combine private pay (income and savings) with home equity (selling or renting the home or using a reverse mortgage), family caregiving contracts, and any eligible benefits (for example, veterans’ benefits). To tap home equity or restructure assets, your parent must have capacity or you must have authority through a properly drafted power of attorney or a court‑appointed guardianship. Be cautious with gifts or “Lady Bird” deeds—transfers can trigger long‑term care penalties and affect future estate recovery.

Understanding the Problem

In North Carolina, how can I pay for my mother’s memory care without Medicaid? You are the only child, and she owns a home with a mortgage but has income that does not cover memory care. You’re weighing in‑home help versus a facility and considering options like using or transferring the house.

Apply the Law

Without Medicaid, the law focuses on your authority to use your parent’s assets and the consequences of any transfers. To use home equity or restructure assets, your parent must either (1) act for herself with capacity; (2) have an agent who is empowered by a power of attorney that specifically authorizes real estate and gifting actions; or (3) have a court‑appointed guardian who can seek court approval to sell or mortgage the home. Gifts or transfers for less than fair market value can cause long‑term care penalties during the program “lookback,” and North Carolina may later seek estate recovery against probate assets if your parent ever receives Medicaid. The Clerk of Superior Court handles guardianship and approval to sell a ward’s real property; real estate transactions often require recorded authority.

Key Requirements

• Legal authority to act: Your parent must have capacity, or you must have clear authority under a power of attorney (including real estate and gifting powers) or a court‑appointed guardianship.
• Home equity access: Selling, renting, a home‑equity loan, or a reverse mortgage are options; a guardian typically needs court approval to sell or encumber a ward’s real property.
• Transfer rules: Gifts or below‑market transfers can create a penalty period under long‑term care rules; use written care agreements and fair‑market documentation if family is paid for care.
• Estate recovery awareness: If Medicaid is used later, the State can seek repayment from probate assets; how real estate is titled at death can affect exposure to recovery.
• Documentation and accounting: Agents and guardians must keep detailed records; poor documentation can invite disputes or court intervention.

What the Statutes Say

• N.C. Gen. Stat. § 32C-2-217 (Agent’s authority to make gifts) – An agent may make gifts only if the power of attorney expressly authorizes it or a court approves.
• N.C. Gen. Stat. § 35A-1301 (Sale, mortgage, or exchange of ward’s real estate) – A guardian can ask the court to authorize selling or encumbering a ward’s real property to provide for support.
• N.C. Gen. Stat. § 108A-70.5 (Medicaid estate recovery) – The State may recover certain Medicaid costs from the recipient’s probate estate after death.
• N.C. Gen. Stat. § 28A-15-1 (Estate assets available to pay claims) – Real property can be used to pay estate debts and claims unless excluded by statute.

Analysis

Apply the Rule to the Facts: Because memory care costs exceed your mother’s income, private pay likely needs home equity or savings. Start by confirming whether a current power of attorney authorizes real estate and gifting; if not, or if she lacks capacity, you may need a guardianship to request court approval to sell or mortgage the home. Be cautious with gifts or an “enhanced life estate/Lady Bird” deed—transfers can create a long‑term care penalty and may not solve the immediate cash‑flow gap. If Medicaid is used in the future, the State may later seek recovery from probate assets.

Process & Timing

1. Who files: If your parent can’t manage finances and there’s no adequate power of attorney, you (or another interested person) file a guardianship petition. Where: Clerk of Superior Court in the county where your parent lives. What: AOC‑SP‑200 (Petition for Adjudication of Incompetence and Application for Appointment of Guardian) from nccourts.gov. When: File as soon as you need authority to act; hearings are typically set on an expedited schedule.
2. After appointment, the guardian of the estate files a petition asking the court to authorize a sale or mortgage of the home to fund care. County practices and timelines vary; plan several weeks to a few months for approval and closing.
3. Close the transaction and apply proceeds to care. If your parent later qualifies for Medicaid and then dies, the personal representative should provide notice to creditors and address any State recovery claim during estate administration.

Exceptions & Pitfalls

• Power of attorney limits: Many POAs do not authorize gifts or real estate transfers; without express authority, an agent may need a court order.
• Transfer penalties: Gifts or below‑market transfers during the lookback can cause a penalty period; formal caregiver agreements and fair‑market payments reduce risk.
• “Lady Bird” deed caution: North Carolina has no statute specifically governing enhanced life estate deeds; results vary and timing matters. Do not rely on this to avoid penalties or later claims without advice.
• Reverse mortgage tradeoffs: These can create cash flow but affect equity and heirs; review fees, interest, and servicing obligations carefully.
• Capacity and documentation: Poor records or transactions made after capacity declines can spark disputes, court intervention, or fiduciary liability.

Talk to a Estate Planning Attorney

If you’re weighing how to fund memory care without Medicaid and need to evaluate home‑equity options, authority to act, and transfer risks, our firm has experienced attorneys who can help you understand your options and timelines. Call us today at .

Disclaimer: This article provides general information about North Carolina law based on the single question stated above. It is not legal advice for your specific situation and does not create an attorney-client relationship. Laws, procedures, and local practice can change and may vary by county. If you have a deadline, act promptly and speak with a licensed North Carolina attorney.