In most states, if you give your house to your children (or to someone else) and then apply for Medicaid coverage of nursing home care, you can be disqualified for a long period of time. That’s because you’re supposed to spend down your assets on your own care before applying for Medicaid, not give them away.
But there is an important exception that allows you to give your home to your children in certain circumstances.
Generally, you can give your house to a child if that child (1) lived with you in the house for at least two years before you entered a nursing home, and (2) provided care to you during that period that allowed you to avoid going to a nursing home.
This exception applies only to children – not to grandchildren or other relatives.
Each state Medicaid agency has its own rules for proving that your child lived with you and provided the necessary level of care, so it’s important to consult with an attorney before you take advantage of this provision.
There are other exceptions, too. For instance, you can generally avoid a Medicaid penalty if you transfer your interest in your house to:
- Your spouse.
- A child who is under age 21 or who is blind or disabled.
- A trust for the sole benefit of a disabled person under age 65 (even if the disabled person is you, under certain circumstances).
- A sibling who lived in the home for the past year and is already a part owner of the home.