Can My Mother Gift Her House to Me to Repay a Debt Without Jeopardizing Medicaid Benefits?

This is a question of proof. While you and your mother characterize the financial transactions as a loan on your part and a repayment on hers, your state Medicaid agency is likely to view them as informal support by you and a transfer of assets by your mother, causing an ineligibility period of up to five years. The burden of proof will be on you and your mother. If you have any evidence of the financial arrangement, such as a promissory note or written agreement, this would greatly strengthen your case. An affidavit as to the facts by a sibling, if any, who is actually hurt by the house proceeds going to you, may also be helpful. In the absence of proof, you may want to make the transfer with the understanding that problems could arise if your mother needs care within the next five years, at which point you can (1) make the best case possible that the transfer was a repayment to you, (2) return the transferred funds to your mother, or (3) pay out of pocket for her care until the five years have passed. We strongly recommend that you consult with a local elder law attorney because treatment of this type of situation can vary from state to state. To find a directory of attorneys, click here.