Are trusts ok to transfer to other states?

It's going to be complicated, you need an atty to deal with this.

I'd be concerned that if the house was not included in the trust initially and with its ownership recorded as "XYZ Trust", that the proceeds from the sale will be viewed as assets of the individuals which will make the NH parent on Medicaid ineligible for Medicaid anymore as they cannot have more than 2k in assets.

Parents being married -with 1 on medicaid in a NH & 1 as a "community spouse" - makes everything Medicaid quite different for how income & assets are done. Once they divorce, the community spouse's CSRA /MMNA will stop, so that will change hiw much copay or SOC (share of cost) is required to be paid to the NH each month. If you are the DPOA for the NH parent, I'd suggest you contact Medicaid ahead of the divorce to find out what the new copay will be so you can make sure the full new amount is getting paid each month. CSRA is pretty high in some states (like TX is $ 2,900 mo), and it can take states a few months to record changes but the new amount due as the required copay starts the month the divorce if finalized. good luck and let us know what happens.

The status of the Trust is complicated by the divorce. You need to know what the divorce said, especially about the sale of the house. PLEASE see an attorney and bring the Trust papers as well as the Divorce papers.

It's my understand that each State has their own laws regarding Trusts. You would need to check with an Elder Law attorney.