My father is currently on Medicaid and has been in a NJ nursing home for approx 3 years. He had a New Jersey property owned jointly with his son since 2001. The home is currently JTWRS. If we change the deed to either Tenants in Common or The Lady Bird Deed, will this make my father ineligible for Medicaid or subject to any Medicaid Penalties.
One big issue with Medicaid is that even though it is a federal program, it is managed by each state according to each states rule of law on property rights, probate and how each state does liens or claims. This really comes into play after death and you are dealing with your dad's estate in probate. In most states, JTWROS accounts or property do not go into probate and become 100% owned by the other person(s), although the other person may find themselves facing a step-up in market value or gift tax on the property. But you really need an attorney with NJ experience on this.
The transfer penalty is pretty severe and the # of months penalty is based on the average NH cost in your state. So if the avg is 5K a month and the property is 100K then that means a 20 month transfer penalty that has to be private paid. This can really bite you in the butt if say it's the above scenario but the NH where your dad is runs 8K a month BUT technically he has 20 months of ineligibility. You can see why a good attorney is invaluable in dealing with all this.
Personally I'd leave whatever at the existing JTWROS so it doesn't rock his acceptance in the Medicaid system. Why change it now?