I have a 26 yr old son who has been helping his 67 yr old friend with her lawn and home maintenance needs for 7 yrs. She has children but they have nothing to do with her and haven't for years. She says she cares for my son as she would a grandson. She wants to put him on the deed for her mobile home. I know from caring for my father for 4 years that medicaid can and will take property if this lady ever needs their help. As far as I know she is not ill at this time and does not need the services of medicaid. But if she should I want to know if they will take this home from my son if he lives there by himself after she moves into a nursing home. I know that if he has lived in and cared for her for 2 yrs before applying for medicaid that they will allow her to give it to him. As his name will also be on the deed I wonder how this will affect him.

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The Caretaker Child exception you reference will not cover your son, since the elder friend is not his mother. The transfer of an interest in the mobile home will be treated as a penalty-causing gift if the elder has to apply for Medicaid within the next 5 years.
In all states the home will be an exempt asset if the elder friend has to apply for Medicaid; however, a few states take the position that if the elder Medicaid recipient can no longer move back home, they are free to treat the house as a countable asset. If so, then she would have to liquidate the house and undertake some other Medicaid planning to reduce the cash she'd get from the sale.
As for Medicaid recovery, yes, the state can indeed make a claim against the elder's interest in the mobile home following her death, which may cause your son to have to sell the mobile home to pay off the state (depending on the size of the bill).
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They look at the cash value of the Mobile Home vs the cost of seizing it. If the unit is over 20 years old (1994), it has no loan value at all, and I doubt if they would go after it.
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