Introduction

Some senior homeowners may want to establish joint home ownership with a new co-owner, like an adult child, who will move in and help them age in place. Or the senior might add a co-owner for estate planning purposes. Whatever the reason, establishing joint home ownership can have an impact on Medicaid eligibility. If the co-owner is added after the home has already been purchased, it can jeopardize the Medicaid eligibility of the person who bought the home in the first place. This could be a problem for senior homeowners who want to establish joint ownership and may eventually need Medicaid, or are already enrolled, but there are other options for families in this situation.

How Joint Home Ownership Jeopardizes Medicaid Eligibility

To qualify for Medicaid, applicants must meet an asset limit, but they are not allowed to simply give away their assets in order to meet that limit, which is $2,000 for an individual in most states in 2025. To make sure applicants don’t give away assets, Medicaid uses the Look-Back Period, which is five years in most states. This means the state will look back into the applicant’s financial history for the five years before they applied to Medicaid to make sure they haven’t given away any assets or sold them at less than market value.

Re-titling a home to establish joint ownership by adding a co-owner is a violation of the Look-Back Period because it is giving away part of an asset, the home. Medicaid applicants who violate the Look-Back Period will have their application denied and they will be penalized with a period of ineligibility. The length of the penalty period depends on the value of the violating assets and the state’s penalty divisor, which is based on the average daily / monthly cost of private-pay nursing home care in the state, and it could last months or years. It’s important to note that the Look-Back Period applies to Nursing Home Medicaid and Home and Community Based Services (HCBS) Waivers, but it does not apply to Aged, Blind and Disabled (ABD) Medicaid, which is also known as regular or state Medicaid for seniors.

Types of Joint Home Ownership Agreements

The two most common types of joint home ownership agreements are Joint Tenants with Rights of Survivorship and Tenants in Common.

• With a Joint Tenants with Rights of Survivorship agreement, the property is divided equally among the co-owners. If one of the co-owners passes away, their share of the property is automatically transferred to the remaining co-owner(s), and is divided equally among them if there are multiple co-owners.
• A Tenants in Common agreement does not necessarily split the property evenly among the co-owners, and after the passing of a co-owner their share of the property is distributed according to their will and the probate laws of the state.

Using either one of these agreements to add anyone as a co-owner would likely jeopardize the homeowner’s Medicaid eligibility, with one significant exception, which is detailed next.

Adding a Spouse as a Co-Owner

Since Medicaid considers all assets of a married couple to be jointly owned, adding a spouse as a home’s co-owner would not violate the Look-Back Period or jeopardize anyone’s Medicaid eligibility. Some married couples establish joint ownership with a Tenancy by the Entirety, which ensures that full ownership of the property transfers directly to the surviving spouse after the death of one without going through probate, and that neither spouse can sell, mortgage or transfer the property without the consent of the other. Tenancy by the Entirety agreements also establish each spouse as owning the entire property, not just a portion of it.

Establishing or keeping joint home ownership is a viable option for married couples who are both applying for or enrolled in Medicaid, but there is an alternative for married homeowners with just one spouse applying for Medicaid. Couples in this situation, which is common, often put the home in the name of the non-applicant spouse, also called the community spouse, after the beneficiary spouse has been enrolled in their Medicaid program. They do this because the assets of the community spouse will not be counted toward the beneficiary spouse’s asset limit during their annual Medicaid Renewal, which ensures beneficiaries continue to meet their financial and functional eligibility requirements after they’ve enrolled, and that they’re getting the care they need. So, the community spouse could sell the home without jeopardizing the beneficiary spouse’s Medicaid eligibility. The community spouse could do this if they wanted to downsize or move in with a loved one, or if they needed the profits from the sale.

Buying a Home with a Senior

Single senior homeowners who want to add a co-owner without jeopardizing their Medicaid eligibility do have another option. They could sell their current home, buy a new home with the co-owner, and establish joint ownership upon purchase. This would not violate the Look-Back Period, as long as the two parties paid equal amounts for the property. While the co-owners live together, it’s also important for them to share home expenses evenly, like mortgage payments, property tax, home maintenance and even groceries, and keep careful track of those records. If the senior pays more than their share, it could be considered a Look-Back Period violation.

When the senior is ready to apply for Medicaid, their portion of the home would face the same exemption rules any home in their state would face. It would be exempt from the asset limit if the senior meets the state’s home equity interest limit and is going to continue to live in the home, or files an intent to return home form. The senior could continue to live in the home and receive care via an HCBS Waiver, or ABD Medicaid. Or they could move into a nursing home and file the intent to return home, and their co-owner would still be in the home to handle maintenance and paying the bills, which can become a problem for senior homeowners who move into a long-term care facility without immediately selling their home.

If the senior homeowner in this situation used a Joint Tenants with Rights of Survivorship, the home would pass directly to the co-owner when the senior passed away. In some states, this would keep the home safe from Medicaid Estate Recovery, which we will discuss next.

How Joint Home Ownership Protects a Home from Estate Recovery

All states are legally required to try and collect reimbursement for the long-term care expenses they covered for deceased Medicaid beneficiaries, a process known as Medicaid Estate Recovery. Some states, referred to as “probate only” states, only attempt recovery through a beneficiary’s assets that pass through probate. Other states are known as “expanded recovery” states because they will attempt recovery via assets outside of the probate process.

So, a joint ownership agreement like a Joint Tenants with Rights of Survivorship that automatically transfers ownership upon the death of a co-owner without the home going through probate can protect it from Medicaid Estate Recovery in probate only states. Agreements like Tenants in Common that do not automatically transfer the home before probate will not protect the home from recovery, and homes in “expanded recovery” states can also be subject to recovery despite any joint ownership agreements.

Other Options for Joint Home Ownership with Medicaid Beneficiaries

There are alternatives when it comes to sharing a home with a senior and transferring ownership without endangering Medicaid eligibility.

Adult children can use the Child Caregiver Exemption, which lets Medicaid applicants transfer their home to qualified adult children without violating the Look-Back Period. The adult child is qualified if they are biological or adopted, they have lived in the home for at least two consecutive years immediately preceding the date of their parent’s “institutionalization”, and during that time they provided care that delayed their parent’s need for Medicaid-funded long-term care. While “Institutionalization” is often nursing home admission, it could also be the receipt of Home and Community Based Services via a Medicaid Waiver. The home can be a single-family house, condo, multi-unit property, mobile home or houseboat, but whatever form it takes the property must be the Medicaid applicant’s primary home, it cannot be a second or vacation home.

Siblings can use the Sibling Exemption, which lets Medicaid applicants transfer their home to a qualified sibling without violating the Look-Back Period. Siblings are qualified if they are biological or adopted, have an equity interest in the home and have lived there for at least one year immediately prior to the sibling co-owner relocating to a Medicaid-funded nursing home or receiving long-term care via a HCBS Medicaid Waiver.

In Texas, Florida, Michigan, West Virginia and Vermont, Medicaid recipients can avoid probate and transfer their home directly to any heir using a Lady Bird Deed. The Medicaid recipients maintain control of their home while they are alive, but after their death it will pass directly to the beneficiary named in in the Lady Bird Deed.