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I own our house jointly with my sister who has dementia and is in a nursing home.

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They will not "take the house", you are safe. They put a lien on her half. You only pay the lien if you sell the house or die.
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Chuck - I'm assuming that you want to stay in your home and that you have family that you would like to see inherit the property or that you may want to sell the property to be able to use the $ in other ways. If so, you want to do whatever to be able to file for an exemption, exclusion or hardship against your sister's Medicaid MERP (estate recovery program) claim or lien on her 50% the property.

The state can file a claim or lien on her 50% upon her death. If you do not do whatever with documentation to offset the claim that lien will sit there forever and with interest on the amount. That will be an issue if you in the future ever want to sell or leave the property to someone in your will. So what to do? WHen you pay the property tax, document it. You are paying your 50% but you are also paying her 50% and that needs to count toward an exclusion against Sissy's Medicaid tally. Houses have all sorts of costs - taxes, insurance, maintenance, repairs, etc - and for all of them you probably are paying your share and also Sissy's. It adds up and needs to be documented with receipts kept to be able to provide to MERP to offset the claim against her estate. You could find that every year you are paying 10K a year on house stuff that is Sissy's share. If Sissy is in a NH for a few years, all that will add up to a pretty good figure that could be deducted from the MERP tally.

Also the state probably has exemptions for those heirs who are low-income or that sell the house would be a hardship. Google your states program so that you know if you may qualify for those too. You want to know what's what now & before the flurry of emotion after Sissy's death.

After Sissy dies the state will send you or whomever is SIssy's family contact for Medicaid (like the person who did her application and does her renewal) a letter from MERP. It is an "intent to file a claim" letter that seeks information. You need to respond to it and let them know your are filing for an exemption, exclusion &/or hardship so that they can determine IF an claim or lien action will proceed. MERP is required to do a cost / benefit analysis before a claim or lien is done. A property with exemptions, etc. may not have a claim or lien done. Good luck.
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