Medicaid and value of home

Under the Caregiver Child exception of federal law, a parent who has entered a nursing home is permitted to deed their house to a Caregiver Child without it being deemed a penalty-causing transfer (gift). In order to qualify for this exception, the child must have lived in the same house as the parent for at least the two-years immediately preceding the parent entering the nursing home, and the child must have provided such care for the parent that the parent was able to delay needing nursing home-level care thanks to such care.

If she is moving to assisted living–as opposed to a nursing home–this exception probably will no longer apply once she moves there. Thus, if she deeds her half to you, it may fall under the five-year lookback provision that counts all gifts within the 5-year period before applying for Medicaid as penalty-causing gifts.

However, if your house is titled as a joint tenancy with right of survivorship, you may possibly be better off not doing anything: her interest in the house is exempt under the personal residence exemption so it will not disqualify her from receiving Medicaid, and upon her death the entire house becomes yours automatically–and many