Whether a state can recover assets that were transferred before the Medicaid recipient’s death depends in part on the laws of your state. Some states have the right to recover funds only from the Medicaid recipient’s probate estate, meaning property that is held in the recipient’s name only. Other states have the option of seeking recovery against property in which the Medicaid recipient had an interest but which passes outside of probate. But there is no Medicaid restriction on transfers between spouses. Since the house was transferred during the nursing home resident’s life it was in neither his probate nor non-probate estate and not subject to estate recovery.
That said, even though the law seems clear on this point, some states are more aggressive than others in attempting to recover Medicaid payments. It would be best to consult an elder law attorney in the state in question to be absolutely sure. Here is a directory of attorneys: http://www.elderlawanswers.com/elder-law-attorneys.
For more information about estate recovery, click here.

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