What happens to joint accounts if my mother goes into a nursing home?

Full question:

If my brother and I are named as co-owners along with my 80 year old Mother on all bank accounts (cash around $200,000) and property deeds (property $600,000 4 in Pa, 2 in Fl no mortgages on anything). What can be taken if our Mother goes in a nursing home?

• Category: Medicaid
• Date: 04/07/2025
• State: Pennsylvania

Answer:

Judgments can be enforced against joint accounts, except for those held by married couples as tenancy by the entirety, when the debt is solely one spouse's. Typically, the account may be frozen, and the non-debtor account holder can file a motion to release their portion of the funds. If a debtor anticipates a lawsuit, they should consider removing themselves from the account to protect the other holder. If a civil summons has been received or a judgment awarded, it may be too late to prevent attachment by the creditor.

For government nursing home assistance, there is a 60-month look-back period to assess any asset transfers made for less than fair market value. This includes transfers to trusts or other systems designed to qualify for nursing home programs while depriving the state of resources for long-term care. Under the Deficit Reduction Act of 2005, this look-back period is five years for transfers made after February 8, 2006. For every $4,300 disposed of, the individual may face a one-month disqualification from Medical Assistance coverage for nursing home care.

The penalty period for transfers made after February 8, 2006, begins on the first day of the month after the transfer or on the date the individual becomes eligible for Medical Assistance—Long Term Care. If multiple transfers occur, the second penalty does not start until the first one ends. The length of disqualification is based on the value of the resources transferred.

Certain transfers do not affect Medicaid eligibility, such as transferring a house to a spouse, a child under twenty-one, a blind or disabled child, a sibling with an equity interest who lived in the home for at least one year, or a caretaker child who provided care for at least two years prior to institutionalization. If the equity interest in the home is $500,000 or less (or $750,000 in some cases) and the individual intends to return home, it may not count as a resource for Medicaid eligibility.

Creating a life estate without the power to sell the house is considered a disposal of resources and may disqualify an individual from Medical Assistance. However, if the life estate deed was created long enough ago that no penalty applies, the house is a countable resource, but the life estate without the power to sell has a market value of $0, which does not disqualify from Medical Assistance. A life estate deed with the power to sell is not considered a disposal, but the house's market value would count as an available resource unless exempt for other reasons.

Fraudulent conveyance transfers are defined under the Uniform Fraudulent Transfer Act. A transfer is fraudulent if made with the intent to hinder, delay, or defraud a creditor or if the debtor does not receive a reasonably equivalent value and is engaged in a business or transaction with unreasonably small remaining assets or intends to incur debts beyond their ability to pay.