The Medicaid sibling exemption allows a Medicaid applicant to transfer their primary residence to a qualified sibling without violating the 5-year Look-Back Period or facing Medicaid penalties. This protects the home from being counted toward asset limits and shields it from Medicaid’s Estate Recovery Program after the applicant passes away.
There are strict eligibility requirements to meet in order for a senior to be able to transfer their home to a qualified sibling:
The sibling must have home equity interest in the home, meaning that they have an ownership stake
The sibling must have lived in the home for at least one year immediately prior to the applicant moving into long-term care in a nursing facility
The sibling must be a biological or adopted sibling of the applicant: step-siblings and foster siblings do not count. Also, this exemption does not apply to any other family members, like adult children, minor children, in-laws, or cousins. However, there is a separate exemption for adult child caregivers. The Caregiver Child Exemption is discussed in other articles on this website.
The Sibling Exemption is a so-called “loophole” that can be used in Medicaid planning to transfer a property for less than fair market value during the look-back period without creating a penalty period.
Please note that this article is for informational purposes only, and does not constitute legal advice. Please also note that the information contained here refers to nursing home care Medicaid, and not assisted living, Home and Community Based Services (HCBS) or any other level of care. For more complete and personalized legal advice, visit a certified Medicaid planner or an attorney specializing in elder law or estate planning.