This is difficult because both of your parents have been receiving Medicaid benefits. Often, where only one has received benefits they can plan to avoid the lien by making sure that the house ends up in the name of the spouse who did not get benefits. Generally, owning the house will not affect the owner’s eligibility for benefits. Normally, I would say it would make sense to put the house in your mother’s name and for her to sign a new will creating a so-called “testamentary” trust for your father’s benefit. This would protect the house from any claim based on benefits paid on your father’s behalf, but could be a problem in terms of your mother’s benefits. What to do may depend on understanding the value of the benefits paid on each of your parent’s behalf.
As you can see, you have a very fact-specific situation which also depends to some extent on how Virginia applies the Medicaid law. I strongly urge you to consult with a local elder law attorney, the earlier the better so that your mother can still take any steps that may be recommended.
For more on Medicaid's treatment of the home, click here.
For more on Medicaid and trusts, click here.
For more on the different kinds of trusts, click here.