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You need to understand how Medicaid works. In my case, all my Mom had was her house. She lived on SS and a small pension totaling an income of 1700 a month. The income cap in NJ for Medicaid is 2100 or 2200 a month. She has 48k in savings that helped to pay for her stay in an AL and private pay for 2 months in LTC. Which took her down to $185 in her bank account way under the 2 k allowed in NJ.

A person receiving Medicaid for their care in a LTC facility is allowed a house and a car. The problem comes when they are not allowed to use their income to pay a mortgage, upkeep or utilities because the income is used to offset their care cost. If the house/car are sold, they have to be sold at Market value. Any money that u pay out of pocket, Medicaid may not allow to be reimbursed. I was told to keep meticulous records and even then, I might not be reimbursed.

Medicaid has a five year look back. If you feel that Mom may need LTC within that time then the house must sell for Market Value. And that money must be put aside for Mom. Any expenditures have to be for Mom. She shouldn't give you or anyone else any large amounts of money either as gifts or loans. It could cause penalties. (there may be a way around this but a lawyer would be needed) Really, its hard to protect assets within that 5 yr period.
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Reply to JoAnn29

If you do buy, keep in mind the price must be fair market value, no discount. Otherwise Medicaid will penalise grandma an amount that is equal to whatever the amount discounted.
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Reply to gladimhere

Patti, GardenArtist mentions proximity of this transaction to application for Medicaid, which is very important to your questions. Please know that in some states the "lookback" time period can be as long as 5 years. Is your mom going into the nursing home soon? Is she applying for Medicaid in order to afford the NH? Or are you and she just thinking into future possibilities? If going into a NH and applying for Medicaid is not imminent I would discuss the best strategy with an elder law/estate planning attorney. It will be money well spent.
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Reply to Geaton777

Patti, it would help if you'd provide more information.    But, just basically:

1.  Is your mother sole owner of the house, i.e., is hers the only name on the Deed?

2.  I assume you want to buy on land contract b/c you don't have the funds or during this pandemic can't get a mortgage to buy it outright?   But you want to remove it from recovery options by Medicaid?   Or the nursing home, assuming that your mother lacks funds to pay for her care?

3.  I assume you also know that you would still be considered as "buying", not "owning" the property?  

4.  If title is still vested in your mother's name, she still owns it, SUBJECT to your purchased interest.    At least that's to the best of my knowledge; it's been years since I've dealt with land contracts.  

I'm close to the edge of my knowledge on how this relates to Medicaid, which is what I assume concerns you, but I BELIEVE it would still be considered an asset of your mother's, and thus subject to eventual recovery if Mom needs Medicaid.

Is this what you were thinking about?  If not, please explain as it's easier to answer when more details are given.
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Reply to GardenArtist

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