Will my mom become ineligible or face a penalty from MediCal if I sell her home?

This is making me grit my teeth a bit.

GTepp, I understand that you and your brother would very much like to be given a house. Wouldn't we all.

However.

Your mother's boyfriend on his death left your mother the house in which she lived. This was a substantial asset with a quantifiable financial value.

Your mother gave you and your brother the house, while maintaining the right to live in the property. Which would be fine, except that having given you and your brother property of - however much value - your mother is now claiming entitlement to state benefits on the grounds that she doesn't have any money.

She doesn't have any money because she's given it to you and your brother.

You see why MediCal might reasonably take a dim view of this arrangement?

I don't know, but I suspect one year is not going to get you and your brother off the hook. Your mother DID own that property, it was bequeathed to her, and not to you or your brother; and now she needs the value of it to fund her own health care. Sell the house, you and your brother give her back her money, spend it until she runs out, then apply for MediCal. Maybe your lawyer knows a way round that. Maybe he knows even knows an ethical way round it. I'd love to hear it.

The medical insurance and health care industries are ripping off the consumer and the taxpayer, so you should too?

I don't disagree that there are scandalous billing practices going on. They happen throughout the health and social care sectors, all over the world. Over here, the public bodies responsible for running services tied hospitals up in 20 or 30 year contracts that delivered new buildings for a low capital cost but now permit the contractors to demand insane, exorbitant fees so that changing a light bulb, say, generates an invoice of £200 - 500% mark up on the light bulb, plus "engineer" time billed at however much per hour, minimum call-out charge applies. And, of course, Health & Safety and insurers' rules absolutely forbid a member of staff or visiting relative to get on a chair and change the dam' thing himself - so you have to wait three weeks for the Planned Preventive Maintenance Programme to "get around to it."

One might suspect corruption at the bottom of this. But when you meet the people in charge of the tendering process you realise that it's far more likely that stupidity and short-term populism were to blame.

As Sir Humphrey Appleby so correctly pointed out, it is not that these things go on that outrages the public, it is being told about it. The issues are political, universal and, as far as I can tell, eternal.

Meanwhile, it's a pity your mother's boyfriend didn't think his gift through, or that they didn't take advice together perhaps. "Too late, too late" the cry. Still! - take professional advice now, maybe there will be something useful that can be done - with a clear conscience 😊

I'm not a lawyer, but if your mom has a life estate (what you referred to as "occupancy for life"), I believe that prevents you from selling the house while she's alive. She has a right to live in that house for as long as she lives. No one would buy the house from you because your mother has the right to live there and the new owners could not stop her. She has a right to live in that house for the rest of her life.

Mom needs atty with CA mediCal expertise.& who works with Real Estate atty & asap.

Reasons are: Home is an exempt asset for Medicaid as long as she continues to own it. Whether it’s community based Medicaid (sounds like she’s that presently) or LTC in a facility Medicaid. But if she sells the house the proceeds from the sale are INCOME for the month of the sale and then become ASSETS for months thereafter. It will affect her Medicaid eligibility as its “at need” program for finances.

Mom supposedly owns the home as she inherited it. There should be documentation filed at the CH from probate court with judges orders or other PC seal to allow the transfer. (Like a Muniment of Title done to transfer house). If not, it will be a serious problem for selling it eventually. 
If the house was over CA property value limit for Medicaid at time of transfer, she would be ineligible for Medicaid. Probably in her Medicaid application any changes are required to be reported within 60-90 days. Most states have property value around 575k. It’s critical to know exact house value & if tax assessor value is whack the atty will have suggestions as to how perhaps adjust value for Medicaid exempt asset determination. Property value is what determines the amount gifted (if she signed it over to you) and transfer penalty period for Medicaid. 

If you do not have the chain / PPINs on filings for the property, you need to get these ASAP. Most countries in most states have all this as a cheap download per filed document. Like Warranty Deed $7.50; Covenant $3.00. If you have to actually go to CH, go around 9:30/10am (courts in session) and take lots of small bills to pay in cash. Also get a copy of current tax assessor valuation and 2 years past, try to get these on line as well. If you need to go to Assessor, it will be a separate office from chancery court or property records office..... take more cash.  

I’m guessing atty did it as a QCD is cheap, simple, cheap filing. 
Did this atty explain the difference between types of Deeds? 
QCD does NOT GUARANTEE ownership. Only a Warranty Deed does that. QCD transfers what the person “thinks” is their ownership, it doesn’t have to be correct or even valid. To me the only way a QCD can work is if it is done by judges orders like in a divorce or a distribution list for probate. Hopefully you have judges orders for QCD? 
Also Selling a QCD property may require more steps & more costs for seller. 
Then atop these Deed issues there’s seems to be some sort of Life Estate (“occupancy for life”). What kind of LE exactly is will be super important cause if it’s moms 100% asset until she dies or gifts it, its very different than it’s % shared ownership with her, you & bro and she will have to do a Remainder Interest workup for medicaid. Remainder filing is super precise & imo not ever a DiY & why real estate atty is needed. 

I would try to get with a elder law atty (NAELA or CELA) very soon once you get at CH documents. All real property filings are in your states database. It’s just keystrokes for the state to do a annual cross check to her name, her SS#. The info will surface. You want your attorney to be proactive in this for your mom. Good  luck.

Also you really do NOT want anything to happen to disqualify mom from her existing Medicaid eligibility.
If she’s 57 and has been on Medicaid for a while, that means she more than likely entered Medicaid BEfORE California signed off on Bush era DRA / Deficit Reduction Act. My understanding is that Anyone who was on Medicaid before DRA cannot be subject to MERP / Estate Recovery or any other DRA new “at need” program requirements as it was not required to be done & acknowledged by Medicaid applicants till after DRA done. So Medicaid cannot try to recoup costs paid on her from the house she owned after she dies. Ask the attorney about this.

What are you talking about?

Your father had a stroke and was uninsured? You son was uninsured as well?

This is only my opinion. If you have assets, pay for your care until the assets run out. Protecting an asset for your spouse, so they aren't impoverished is fine. Don't try to hang on to assets to leave an estate for your children.

This isn't making sense. If she never owned the home then why did she have to sign a "quit claim deed" to you and your brother.

You need to see an elder law attorney before you do anything. Gifting you and bro the house could make mom ineligible for Medicaid. And you do not want that to happen. What is something happens that she needs nursing home care but there is a penalty in the amount of the house value that will have to be repaid to Medicaid or you and bro pay out of pocket for mom's nursing home. That is a no brainer to me as I would never had been able to pay mom's $8,000.00 a month care bill.

MERP aka Estate Recovery came into play once a state adopted the Bush era DRA Deficit Reduction Act of 2005. All states have this requirement now. And all states have exemptions and exclusions as well as a cost-benefit requirement to MERP.

Worriedin Cali - wasn’t both your grandparents on CA IHHS program? So the grands were living in their home and had State of CA paid caregivers that were family, right? For several years & various family members did it, right? So the grands contributed part of their monthly income (if high enough) to the state to offset what state pays caregivers throughout their IHHS. If I’m not mistaken, I think IHHS requires the “ caregiver” to do this as their primary job & as IHHS pays slightly above state minimum wage & usually around 18-24 hrs a week, then they (the caregiver) themselves are considered “low income”. Being a low-income Heir is an exemption for Estate Recovery. I’d bet that this is the rationale State used to transfer the house to them & outside of any MERP. State has all the data on the grands and caregivers/heirs, & to the penny, so State can do the transfer and be ok for federal Estate Recovery rules. I bet that’s the scenario. To me, your beyond fortunate that your family could do this but it’s an outlier example of how MERP can be gotten around as most states do not have IHHS and most families don’t have generations of family around to be live-in caregivers for 2 different elders and have family who work for the state program to advise what can be done legitimately.