How Does Medicaid Treat the Purchase of a Life Estate?

We live in NJ. My dad broke his hip from a car accident, went through therapy, came home to his house, and fell down his steps and broke it again. His house had too many steps so he could no longer live there. We sold my dad's house and used the money as a downpayment on a new ranch style house for myself, my wife, and my dad. We went though an eldercare lawyer who created the deed giving my dad a life estate and my wife and myself ownership after my father's death. My name is the only name on the mortgage. My Dad lived with us for one year and four months. His dementia has really increased, and we had to put him in a nursing home. We are applying him for Medicaid. Any ideas on how Medicaid will treat the life estate?

Based on what you say, your father's purchase of a life estate in your new home should not be treated as a disqualifying transfer. He lived in the house for more than a year, which is a requirement under new laws. So the only issue should be whether he paid the appropriate amount for his life interest. The amount is determined based on your father's age and the value of the house. Given that this was structured by an elder law attorney, it should fit the requirements. But to be sure, you can go back to the elder law attorney and make certain that the transaction did meet all of the requirements.