I am a caregiver for an aunt with whom I jointly own savings...

Medicaid coverage (either for medical care or for long-term home or nursing home care) is only for people with low income and few assets. So, if and when your aunt applies for its coverage, Medicaid will look at the total amount of her assets to determine whether they are low enough for her to qualify. This will include both cash assets and things like stocks and savings bonds. It doesn't matter to Medicaid whether your aunt's asset is in the form of a savings bond or cash from the sale of a savings bond. What they will look at is how much of that savings bond (or the cash from its sale) belongs to your aunt and how much belongs to you. If you each own 50 percent of the bond, then that 50 percent amount is what Medicaid will count part of your aunt's assets, whether it is still in the form of a bond or has been cashed.

If you sell the bond and keep or spend all of the cash yourself, then Medicaid might consider that your aunt "gifted" to you her interest in the bond. This would have no effect on her eligibility for regular Medicaid coverage for medical care. But if that "gift" of her interest in the bond took place within five years of her applying for Medicaid nursing home coverage, Medicaid "look-back" rules might impose a penalty on her, denying coverage for awhile. The exact period of her ineligibility would be calculated by taking the value of her interest in the bond and dividing it by the average monthly nursing facility cost in the state where she lives. The period of her ineligibility would begin from the date she applies for Medicaid coverage.