There would be no problem with Medicaid and a jointly owned home in your state if a Medicaid recipient has an interest in a property equal to their financial contribution. For instance, your mother pays a third of the purchase price, and you and your spouse contribute two-thirds. Whether from the proceeds of the sale of your current home, through a mortgage, or a combination of both, there would be no transfer of assets to jeopardize Medicaid eligibility. If you titled the house in joint names, it would pass automatically to you and your spouse upon your mother’s death. Medicaid would not attempt to recover the home to pay for care.
Contributing Beyond an Equal Financial Interest
If your mother contributes more than a third of the cost, the balance could be considered a transfer of assets. That’s not a problem if your mother waits at least five years (the lookback period) to apply for Medicaid. You could also avoid any penalty by entering into an agreement about the care you will provide your mother valued at the excess over and above one-third of the purchase price.
Other Options When It Comes Time for Nursing Home Care
Another option would be to take your chances and, if your mother does need care and runs out of her savings before five years have passed, to pay the cost of nursing home care yourselves until the five-year lookback period has passed.
Consider Other Family Members
If you have siblings, it would be best that they are made aware of the entire transaction so that they can voice their objections, if any, now rather than allowing resentment to build up over time.
Keep in mind that different laws may apply depending on your state. To make a joint purchase with Medicaid in mind for the future, we recommend consulting with an elder law attorney in your state for Medicaid planning tailored to your family’s situation.
Harry S. Margolis practices elder law, estate, and special needs planning in Boston and Wellesley, Massachusetts. He is the founder of ElderLawAnswers.com and answers consumer questions about estate planning issues here and at AskHarry.info.