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Medicaid is a needs-based program and they are fully expected to spend-down their assets on their care before they can go onto Medicaid. The state cannot place a lein or claim on grandson's house as he is not the one applying for Medicaid. But grannie can get a TRANSFER PENALTY imposed by Medicaid. Transfer penalty is tough to get out of and the family will be in a total panic in having to private pay for the NH and grannie is already in the NH oblivious to what is going on. This is an awful situation to place them in and stressful for all and you will have to get an attorney to deal with it. The review is 5 years so if grannie applied today, the state could go back to 2008. That is a long time.

If the house sold for 140K, the state would expect all that $ to be spend by grannie by her & for her. She can spend on whatever she wants AS LONG AS IT IS FOR HER. If she wants to do a cruise on the QE2 or get a facelift, that is for her that is fine. There were ladies at my mom's IL who did this! But if she gifts or spend it on stuff that benefits others, then the state can impose a "transfer penalty". Remember real property (like house, car) is recorded by the local assessor and then dovetails into the state's database. Sale of house will show up.....eventually.

I'd highly suggest she part with some of the 140large and see a experienced elder law attorney and asap. There are things they will suggest that could be done - like a personal services contract in which grannie pays grandson for care, or structure the adaptation to the home so that it specifically benefits grannie and not the property owner. Plus she can get all her legal updated and they can advise what other spend-down can be done now or items changed (like ownership of life insurance policies) so that no issues later on IF she applies for Medicaid.

Transfer penalty varies by state as it is based on your states reinbursement rate for Medicaid room & board day rate. For TX, it's about $ 145.00 a day (low), so an 140K home sale would mean 965 days or over 2 1/2 years she would be required to private pay for the NH.
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yes
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Is his house going to remain entirely in his name?
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