Answer: Medicaid will look back for 5 years, but that does not mean she is ineligible for five years. The ineligibilty or penalty period is determined by dividing the amount transferred, which would be the assessed value of the house, by the average monthly rate of a nursing home in your region. The trust is the owner of the home and would be responsible for the bills, so when the trust is set up, make sure it has funds, either in cash or in stocks/bonds, that can be quickly converted to cash.
If you have further questions about Medicaid, I would suggest that you locate an Elder Law Attorney in your state by going to the ElderCare Matters website at www.ElderCareMatters.com/statechapters.htm
Sonya Mittelman, Attorney at Law
Bronx, NY 10461
Member of the national ElderCare Matters Alliance, New York chapter