Q: Can Granny still be sent to jail?
A: Of course you are referring to the 1996 Health Insurance Portability and Accountability Act (better known as the Kennedy - Kassebaum Bill) which made it a crime to give away assets in order to qualify for Medicad and then to apply in such a way as to violate the law or rules and regulations. Any paid advisors who counseled Granny (or Grandpa) could also be convicted, even if the advice was general and in no way intended to assist Granny in obtaining improper coverage.
But the latest Budget Act amended Kennedy - Kassebaum (go figure) so now Granny can still be subject to civil penalties and fines, but not criminal sanction. But paid advisors can still wind up in jail. Thus, one local wit made two observations - (1) the Seniors have better lobbyists than the lawyers, and (2) having all of those lawyers in Congress may not always be an advantage to their brothers and sisters of the Bar.
Q: I spend part of the year in another State. I have just been notified by that State that I am being deemed to be "domiciled" there. But Colorado is my home.
A: Your problem is not that uncommon. Your physical residence can be different from your "legal" home. Competing jurisdictions are supposed to count up your legal connections with each State to determine which State has the right to claim you.
The following are some of the things that are considered: registration for voting; where the driver's license was issued; location of any car registration; designation of domicile in documents such as federal tax returns and passports; in which state a person files as a resident, and where a person files as a nonresident, etc.
The actual number and required kinds of "legal incidents of domicile" can vary depending on the particular reason why the other State is attempting to claim you. But the more you make your legal connections to Colorado, the better your odds of resisting the encroachments of the other State. Even though your spouse has the right to maintain a different domicile than yours, I have found that it is easier if each of you mirror the other.