Legal Question in Elder Law in Indiana

Federal law regarding taxation of gifts and Federal law regarding Medicaid are two different things. Just because you can make a tax-free gift doesn't mean that it will be permitted by Medicaid rules. So, it is possible that Medicaid would regard the gifts as attempt to hide assets.

The father may be entitled to make a gift ,as Medicaid does not consider the income of the other spouse, though they will look at the overall assets. It's not clear where those funds are coming from and whose they are. There are other things that can be done, if the effort is to qualify for Medicaid without having a horrific spenddown to make. One thing is certain: You need to speak with an attorney about it before you do anything. It is quite possible that such a gift would be deemed a transfer of assets which, while not necessarily disqualifying her for Medicaid, could affect the level of income/assets to which they attribute to her in the process.