Will our house be protected from Medicaid if my father in law needs to be placed in a nursing home?

Is it a Life Estate or a Trust? How Medicaid looks at them depends on which legal structure and what CA law allows. Plus add in if it’s 5 years ago. Really review the document and write down your concerns & ? and schedule an appointment with the law firm that did it initially.

Either way I’d be somewhat concerned about if the 50% $$$ you & hubs contributed so your dad could buy the house could be considered your equity or a loan or if it would be considered a gift to your dad of all the 50% $ you & hubs paid. If it’s a LE and the $ you contributed is included in the overall figure to determine the remainderman interest (needed to get done so he can qualify for Medicaid), it’s going to cost you on your $ if it’s viewed as a gift. Clearly find out about this and if anything can be done now to clarify it’s not a gift. Good luck and let us know what happens. 

Hi Alfred, please correct me if I'm wrong as I know very little about living wills and trusts, but it was my understanding these are revokable while the grantor (my FIL) is alive and competent, but once he passes it becomes irrevocable. I will have to check the wording on the trust. Thank you!

This is a difficult question to answer without knowing the details of the trust. If the trust is revocable, then your FIL's share may be considered an asset for Medicaid purposes. Any transfer to you or a different kind of trust at this point would be subject to the five year look-back period. Although, depending on his condition his level of income and his other assets, this may still be something to consider if you think he can stay at home now and handle private pay in a NH for the next five years.