A life estate should not count at all as an asset in determining your mother's eligibility for Medicaid coverage of her nursing home care. A life estate is a contract right that is exclusive to the person who holds it -- it has no market value, since it can't be sold or transferred to anyone else. Once your mother is no longer able to live at home, the life estate "asset" -- the right to live in the house -- will have no value. So, Medicaid should not consider it an asset when determining her eligibility. Even if Medicaid were to consider the life estate an "interest" in the home, a home is exempt (unless worth more than a certain high limit set by your state's Medicaid program) when considering Medicaid eligibility. To find out the specific Medicaid rules for the state where your mother lives, use any Internet search engine and enter the words Medicaid and the name of the state, which will take you to the official web site of the state's Medicaid program. Or you can go to the Benefits.gov web site
and click on the name of the state. You can also call the Eldercare Locator toll-free at 800-677-1116.