Can a Medicaid Recipient's House Be Transferred to a Caregiver Child After the Recipient's Death?

Unfortunately, the answer is "no." This is a common misconception. There is a caregiver exception to the usual penalties for transferring assets for a child who has lived with the parent for at least two years before the parent moved to a nursing home and who during those years provided care that enabled the parent to stay at home. It's not clear whether this would apply in your case since your father moved to an assisted living facility rather than a nursing home. But assuming it did apply, it does not protect the estate from the state’s claim to recover its expenses from your father’s estate – a real trap for the unwary. That said, I’d recommend that you look into your state’s hardship exception to estate recovery. There may be some protection there for your sister depending on her circumstances. For more information about estate recovery, go here: http://www.elderlawanswers.com/medicaids-power-to-recoup-benefits-paid-estate-recovery-and-liens-12018