Can Mom Buy a New House Without Affecting Medicaid?

Yes, that should work for Medicaid purposes as long as your mother has an ownership interest in the property that reflects her contribution to its purchase price. If your mother’s contribution is more than one third of the value of the house, that could be a problem for Medicaid. Instead, your mother might spend down some of her savings by helping to pay her share of household expenses and any care needs she may have in the coming years. The house should be in joint names so that when your mother dies, the house passes to you and your husband free of any liens.

If you have siblings, another issue is what happens to your mother’s investment in the house after she passes away. Do you share it with your siblings or is it considered recompense for the assistance you will provide your mother? Total transparency and a written agreement are very important. Writing down everyone’s expectations serves several purposes: It makes sure you all have the same understanding of the arrangement; it often raises issues you may have not considered; and, down the road, it can serve as an important aid to memory. Given what’s at stake and the fact that every state’s Medicaid agency has its own policies, we recommend that you consult with a local elder law attorney. To find one near you, go here: https://www.elderlawanswers.com/USA-elder-law-attorneys.