My mother is on Medicaid living in a nursing home in Michigan. What can I legally do with her house to protect and maintain it?

Medicaid will eventually put a lien on the home. That's basically what they will do, but up to that point there won't be any problem with your child living there as long as the taxes are paid, utilities are paid, the property is maintained, (mortgage if there is one) is paid and so forth. Medicaid will not be looking into rent payments or anything like that in this situation, but they will likely eventually put a lien on the property as part of their recovery process.

This would be a question for a lawyer that is well versed in Elder Care law as well as Medicaid.
I would think you have to charge rent at the rate for that area for the value of the rental.
As to maintaining it the "rent" money could then be used to maintain the property.
If you are supposed to maintain the property any receipts for work would need to be kept. So mowing the lawn, snow removal, repairs would all fall under that. Things like gas, electric maybe could be split since in order to maintain the property the heat has to remain on to avoid frozen pipes. But the the usage would be more if someone is living there. (this just seems logical, I am not a lawyer)
Please consult a professional.

Your question is more complicated. Do you have POA? Is Mom competent?

I think you need to talk about having someone live there and not paying rent with Medicaid. My nephew had lived with my Mom for 6 yrs when she came to live with me. He was disabled. The first caseworker I talked to said nephew being disabled did not allow him to stay in the house, he wasn't Mom's child. Since Mom had 4 bedrooms in her house, they said my nephew could stay there for $1600 a month. This was based on HUD criteria. My nephews income was $1000 a month.

This was not the person's residence before Mom was placed in LTC. I understand where your coming from but Medicaid looks at it as the rent could be offsetting her care. Even if you hold onto it till she passes, Medicaid will put a lean on it. That lean will need to be satisfied if the house is sold. If a spouse is involved the lean will be put on the house but won't be recouped until the spouse, dies, sells or leaves the home. Anyone else has to prove residency before Mom went into a NH. And that they can afford the upkeep.

So for me, I would sell the house and use the proceeds to pay for Moms care. It has to be sold at Market value.

FreqFlyer raises good issues, especially about payment for upkeep.   Do you have funds for the upkeep?    Something I unexpectedly and frustratingly learned that in my area in Michigan, trades are booked solid.  It took 2 months to get someone to fix a torn off gutter and fascia, after contacting 12 companies, some of whom either didn't return calls, or made appointments but never showed (3 times no show!).  

I'm ending up making some "rube Goldberg" patches and changing my approach.  In addition to the pandemic and potential spread by those who work in multiple areas, including inside, I'm just tired of trying to find help.  

You'd also have to carry renter's insurance.

Another issue is whether or not the house needs any repairs now?    If so, try to get estimates so you'll have an idea what you have to pay out originally.

I would make a list of all the known and regular expenses, do a good review of the house and identify potential repairs, contact trades people and find out their availability, as well as get estimates from realtors on the potential value of the home.

I think the bottom line is whether you can afford to maintain the house w/o any income from it, for an indefinite period.

I can understand that this is a challenging and difficult decision, so take your time to be thorough, and make sure that you're comfortable with your decision before moving forward.

Whomever is the POA or the Guardian can, yes, allow someone to occupy as caretaker in exchange for living there. You say she is on Medicaid so there are no assets, as said below, to pay for upkeep, repair, insurance, and when the home IS sold then the medicaid costs will be recovered in any case from that sale of the house. You may want just to sell, as said below, or you may want to wait. A home without an occupant deteriorates very quickly and often is difficult and costly to insure if it can be insured at all. Wishing you luck in this decision.

bhksfrost, since your Mom will not be returning to her house, it might be best to sell it on the open market price. The profit can then be used to help pay for your Mom's care. Otherwise later down the road, Medicaid could place a lien on the house so they can be reimbursed for your mother's care.

Since your Mom is on Medicaid and in a nursing home, she cannot pay the property taxes on the house. She cannot pay the house insurance [which is different when there are "tenants" in the house]. She cannot pay for a new roof, plumbing repairs, fixing the appliances and everything else comes along with owning a house. Will all those cost be worth it for a house that may or may not stay with the family?

It may be just easier to just sell the house. Your Mom would then go off of Medicaid until all the funds are used up, then she can apply to return to Medicaid.