My father is on Social Security and Medicaid. He is currently paying a mortgage and his name is the only name on the mortgage...
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Answer:
The answer depends on the ownership interests in the house, rather than the names on the mortgage. Typically, medical bills may only by recovered from the value of a joint tenant's proportional interest in property. However, by creating a joint tenancy in this manner, the person assuming joint ownership has received a gift and loses the step-up in basis at death. Capital gains taxes may have to be paid. Also, if the property is not the principal residence of the new tenant, the capital gains exclusion cannot be used either.
It is possible for transfers to be ignored and included in the patient's estate for Medicaid recovery purposes. Medicaid looks back 60 months from the date of a Medicaid application to determine whether you have made any gifts. The lookback period is only an audit period during which time Medicaid has the right to review all of the financial records of the applicant.
