When a married couple applies for Medicaid, assets are either exempt or countable towards the Medicaid eligibility limit. Exempt assets usually include the residence, when a spouse or certain other family members are living there, one automobile, furniture, clothing, etc., Typically, when one spouse is in a nursing home and the other spouse is living at their residence, the residence is exempt for Medicaid eligibility purposes. This would mean the spouse could keep living in the house and it would not negatively impact the other spouse’s Medicaid eligibility.
However, sometimes the title to the residence is not in the name of either spouse. For example, the home could be “owned” by a trust that the married couple established. In this case, it is possible that the home will not be exempted for Medicaid eligibility because it is not owned by either spouse. For example, a federal court decided that it was improper when a married couple set up a trust to have ownership of the residence at the time of the Medicaid resource assessment, when the ownership could shift back to the couple. As a result, the residence was not exempt for Medicaid eligibility because it was not owned by either spouse at the time, and the couple was penalized for Medicaid eligibility.
If you are in a situation or considering a situation where a trust would own your residence, or if you are considering transferring ownership to your residence to someone else, it is very important that you contact an elder law attorney beforehand. Transferring title to property prior to getting Medicaid may result in a Medicaid penalty if they find that you transferred it for less than fair market value. As you can see, title and ownership transfer can be a very sticky subject when you are trying to qualify for Medicaid. Make sure to talk to a professional to help keep your Medicaid eligibility on track.