My father in law gave my husband 96000 to buy a house after his wife died but now that he has blown all his money he tells people he is broke because his money is tied up in our house. We now are answering adult protective services calls, did we do something wrong? We asked him if he wanted it to be a loan numerous times but he insisted it was my husband's inheritance.
The investigation sounds like something else, someone feels you have taken advantage of him financially. Are there other sibs who may be resentful? Is there any hint he was not thinking straight when he made this gift?
As to your question, the look back is 5 years. If the house money was longer ago than that, there's no problem. If it was more recent than that, then it would only apply if you intend to apply for Medicaid. If you do, then they would disqualify him from receiving Medicaid assistance till the $96,000 had been spent on his care. Then you would reapply.
Also, if he has more than $2,000 in cash or other non-exempt items, he would not qualify. He can own a home but when he dies Medicaid will recoup their money from the sale of the home.
Hope this helps...good luck!