Does inheriting parent's assets affect Medicaid?

You should notify Medicaid immediately about the sale of the asset. They may require that the portion of the money that belongs to your sister be applied toward her care, which would temporarily disqualify her for Medicaid. She could reapply after the money was spent down. Talk to an attorney and the people at Medicaid about the best way to do this.

You should probably contact an attorney. Medicaid will take anything they can get. I am getting ready to place my mom in a memory care unit (although she is refusing to go) and I've been working with an elder care attorney. Medicaid is very particular with some things. My attorney told me that from now on my mom cannot give any more gifts to people (she was always generous with gifts to her grand children, etc) but that's out now. And I have to start keeping track of every penny spent. It's a mess. The attorney transferred her house to me recently and I don't know how that will sit with Medicaid. I wish you luck!