Will Medicaid Claim My Mom's Home Sale Proceeds?

This is a kind and proactive plan, but it is one of the most complex areas of Medicaid law. When your mother sells her home, that money — which was previously “exempt” because it was her primary residence — suddenly becomes countable cash.

If she puts that cash into a new home where she is on the title, you are essentially creating a joint asset, and Medicaid has very specific rules about how they “get their money back” later.

1. The Immediate Hurdle: The “Transfer of Assets” Rule

Before worrying about what happens when she passes, you must consider her current eligibility.

• If your mom puts her home sale proceeds into a house that you also own, Medicaid may view this as a gift to you. For example, if she pays $200,000 for a house but the title says you both own it 50/50, Medicaid might say she “gave” you $100,000.
• This could trigger a penalty period where Medicaid stops paying for her care.
• To avoid this, her ownership interest in the new home (her share of the title) should exactly match the percentage of money she contributed.

2. Medicaid Estate Recovery (After She Passes)

States are required to stand up a Medicaid Estate Recovery Program (MERP). After a recipient passes away, the state is required by law to try to recoup the costs of her care from her estate. If your mom is on the title, her percentage of the home is part of her estate. Medicaid can place a lien on the house for the amount they spent on her care.

3. Will They Want the Money Back?

Technically, yes. If she is on the title and no exceptions (like the caregiver transfer) are legally processed, the state will likely place a claim against her portion of the property value.

• Common outcome: They typically don’t kick you out of the house immediately, but they will want the debt settled if the house is ever sold or if the title is transferred out of her name.

Your Recommended Next Step

Because intent and documentation are everything to Medicaid, you should consult an elder law attorney before she sells her current home. They can help you structure the new purchase) so that her investment is protected and your future home isn’t at risk.