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Home was not counted towards dad when he went on Medicaid as it had been put in life estate far enough in advance. Can they sell the home and what would the ramifications be to Mom and Dad? Would it effect Dad's Medicaid?

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I’m going to approach this from a different angle.... What is the likely future situation for your mom???
Your mom right now is considered a Community Spouse living in a home totally outside of MERP / Estate Recovery as it beyond 10 yr on LE. Just how to best position her for any financial changes she could do & it’s affect to the Medicaid rules for CS & Medicaid NH spouse is not simple. 

Is she needing a facility like yesterday and if so would it be AL private pay or a NH which could be paid by Medicaid once she qualifies?
OR
Is this more that mom is just fine could probably outlive dad but house is way way too big / too rural / too much upkeep for her and she wants a condo closer to family, grandkids?

What’s the backstory??? 
And on LE house, beneficiaries living there? Property value? Do beneficiaries want it? 
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Traditionally, the look-back period was three years. Gifts and other transfers made more than three years before someone applied for Medicaid long-term care benefits would not affect eligibility, but transfers made less than three years before applying might. In early 2006, Congress decided, as part of the Deficit Reduction Act (“DRA”), that three years wasn’t long enough, and increased that to five years. It was then up to the states to implement that change in the law. So now the look-back period is five years.

Check your state to make sure if they updated a change in its Medicaid rules to be consistent with DRA. Its new rules went into effect on January 1, 2012. However, the new rules apply retroactively in the case of someone who has made any gifts or other transfers of property on or after January 1, 2007, which are within five years of their date of application. I hope this helps you!
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Selling the house would create income and thus need to be spent down until he could qualify for medicaid again which would not leave money to buy a new place to live. 
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