When a nursing home resident applies for Medicaid, the state totals the assets of both the nursing home resident and the community spouse, even if the property is in the name of the community spouse. In general, the community spouse may keep one-half of the couple's total "countable" assets up to a maximum of $123,600 (in 2018). If a Medicaid applicant transferred assets within five years of applying for Medicaid, the applicant could incur a transfer penalty, which would make the applicant ineligible for Medicaid for a period of time. However, transfers to a spouse are an exception to the transfer penalty rule. So while your stepmother’s transfer of assets to herself won’t cause a penalty period, those assets will still be considered countable assets for purposes of Medicaid eligibility. We strongly recommend contacting a Colorado elder law attorney to find out the best way to handle assets when applying for Medicaid. Here is a directory of attorneys in Colorado:  http://www.elderlawanswers.com/colorado-elder-law-attorneys 

For more information about Medicaid’s asset rules, go here: http://www.elderlawanswers.com/medicaids-asset-rules-12016