Exempt assets range from a home to a wedding ring. After an exempt asset is identified many states add contingencies to keep it exempt. Most states will combine all countable assets of the husband and wife, assign half to the nursing home resident and half to the community spouse, then determine if each meets the financial criteria. Prenuptial or other kinds of agreements that split ownership of a couple's assets are not valid when qualifying for Medicaid. The income test also varies by state.
Many states simply consider the applicant's income versus the cost of care.
When a community spouse enters the picture, the income qualification criteria becomes much more complicated. All the remaining income must go the cost of the care. Many people promote transferring countable assets to give this illusion. To qualify for Medicaid, the transfer must be an irrevocable transfer, meaning the Medicaid applicant no longer can have control over the asset. Transferring to kids can work.