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Father-in-law is wanting to give the land of the family farm to my husband as he has not been able to farm it for some time, so my husband has been doing the work and letting his father keep the income to live on. I'm worried that he may need long term care in the future as dementia does seem to run in their family and that this could come back to haunt us. The tax assessed value is way lower than what it could be sold for. We could definitely come up with the money to pay the tax assessed value if we need to, but not the full amount that the farm could sell for. Does anyone know if Medicaid considers fair market value off the tax assessor rolls or do they go by comps of what land has sold for in the area?

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I would think that the assessment of value by several realty areas in the area, with comps, would do the trick, but this isn't something you can afford to be wrong about. I hope Igloo is about and can weigh in on this one.
I would check with a Trust and Estate attorney or elder law attorney. You can also call medicaid at 1-800-medicaid to find out how to do this but do know medicaid is a joint benefit Federal and State. The honest best route is buying an hour of time with an attorney in your area. Be certain this is a "by the hour" appointment as of late on Forum we are hearing of attorneys doing a one time charge of 675.00 for you to walk into the door, telling you "more if we have to research." Any Elder Law Attorney or Trust and Estate attorney should have this info pretty much at fingertip.
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You need to find an estate law atty who does Medicaid work & has an affiliation with a ranch/farm real estate attorney. It’s beyond the normal situation.

How your State runs its Medicaid program is ime going to be beyond important as some States have it that “working” farms / ranches are exempt assets from Medicaid estate recovery (MERP). If your state does this, there would be no need to sell it…. as it could pass onto heirs after death. It it has to be working and “working” well that’s interdependent on what type of ranch or farm and those type of questions are what the real estate atty deals with. I know of someone who’s parents had a seriously large ranch, like sections not acres, had just enough cattle on it to be TSCRA & have ranch tax filings / exemptions. Both parents went into a NH on LTC Medicaid then died. No estate recovery. It was a working ranch and exempt.

Really call around to find an atty experienced in this type of situation.
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I would strongly encourage discussing with an estate lawyer. There are options out there that could work for both your FIL and husband. I had ag land I wanted to keep in the family so I set up an LLC with my adult (early 20's) children as owners but I am the manager. I still control the decisions until my children are wiser in business or until I am unable to make those necessary decisions.
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I am by no means an expert and there are others that will answer in much more detail but a thought did come to me.
If your husband is working the land is he getting paid to do so? If not could the work that he has done be counted towards payment for the land. This might have to be detailed in a contract so it might be advisable to talk to an attorney about it.
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