No, the change of beneficiaries is not a gift and is not subject to penalty because your father still owns the IRA and can do what he wants with it. Depending on the state, the IRA may still be an asset that has to be spent down to qualify for Medicaid. Some states, however, do not count IRAs as an asset, especially if the spouse of a nursing home resident owns the IRA. And if one spouse moves to a nursing home, the healthy spouse can keep up to $120,000 of countable assets, depending on the state. If you are thinking about Medicaid, we strongly recommend you consult with an elder law attorney in your state. To find one near you, go here: https://www.elderlawanswers.com/elder-law-attorneys. To see how your state treats IRAs for Medicaid purposes, click on "Key Medicaid Information" on the page for your state.
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