Follow
Share

My mother-in-law got divorced in the 90's and through that divorce got a decent chunk of farmland. She remarried in the early 2000's to a man that now has been diagnosed with Parkinson's and has been falling quite a bit lately. He is still working but will need to apply for Disability soon. She is worried that if he has to go to the nursing home and is there for an extended period that the nursing home will "take" her land. His name is not on the deed to the land at all. TIA

This question has been closed for answers. Ask a New Question.
Inga - to expand a bit on Pam's answer....."working" is going to be central to getting the farm to be viewed as an exempt asset. It's going to be an asset, even if in only her name, as medicaid will look at all assets owned by each, BUT you want it to be considered "exempt".

I'm not familiar with farms but am somewhat familiar with how Medicaid in TX looks at ranches. Most ranches are big, like 20, 50, 100+ sections. They are an exempt asset for determining eligibility and exempt from estate recovery if you can show they are "working". Like membership in Cattlemens Assoc, feed/grain cooperatives, auction bid sheets, etc. There is going to need to be some sort of appraisal done beyond whatever tax assessor has on the land. And "working" is going to be tied into looking at taxes done on the ranch (P&L is going to be submitted), info on everybody who gets a K1, etc. May need to restructure how depreciation & losses are determined; have her 20k amortized so no spikes in monthly income, etc. It's going to be complex and not ever a DIY project imho. She needs to get a NAELA or CELA level elder law atty to take the lead on this as they will have the CPA, appraisers, etc they work with and totally understand the nuances of Medicaid review. The local Medicaid caseworker is more than likely to just move the application up the chain to a special unit for evaluation as this is pretty high cotton financial and way way WAY beyond their training. To counter this she needs to have a NAELA / CELA level atty.

Ranches / farmland situations are actually common enough that there was a section on my moms standard TX Medicaid annual renewal on this. Ditto for oil & gas revenues & royalties. If SD does annual renewals, your more than likely going to have the atty do the renewal. So this is going to be a long term relationship. If you can try to have mil get on this ASAP so whatever changes done are going into this years tax planning. Good luck.
Helpful Answer (0)
Report

We live in South Dakota. Is SD a common law or community property state? I thought i read it was common law. Not sure if that is correct. I'm very new to Medicare and Medicaid since they have asked for my help. So, i appreciate your help and will find an attorney to take my in-laws to.
Helpful Answer (0)
Report

I thought community property only applied to assets that were acquired during the marriage. From what I understand, inherited properties that are in one person's name continue to belong to that person, even in a community property state. Also any properties or accounts that were owned prior to the marriage continue to belong to that person. Is this thinking wrong?
Helpful Answer (2)
Report

Well, thanks for your half helpful, half judgmental answer. I never once said she was trying to hide assets and i understand that Medicaid is paid for by the taxpayers since i happen to be one of them and so are my in-laws. This land is her only income (20k per year) and if she has to sell it, 20-35% of it would have to be paid to the IRS. The money left over would only be enough for her to live off of for a about 5 years. Should they have planned better? Absolutely! However, the plan they had didn't work out.
Helpful Answer (0)
Report

Medicaid is very reluctant to go after working family farms. If he goes on SSDI which is social security disability insurance, it would not affect them at all.
Should he need nursing home care, the community spouse (her) is entitled to keep enough assets and income to support her needs.
The house they live in and one car are exempt until his death. I highly recommend they sit down with an Elder Law attorney NOW and plan for the future.
Helpful Answer (1)
Report

This would depend on two things. Do they live in a community property state? Was there a pre nup?

If they live in a community property state, then all assets become joint,and are counted towards the Medicaid spend down.

If there was a prenup that says that all their previously owned assets remained their own, it would be protected.

And...just for the record...Medicaid doesn't "take" anything. Long term care costs money. Medicaid is for people who have no assets to pay for care. If you have assets to pay for your care, then you spend them FIRST and when you are at the Medicaid approved level you are then covered by Medicaid. Medicaid is paid for by the taxpayers...(me)...it's not a way to hide assets so that the taxpayers can pay for your care. Medicaid allows one home, and one car to be exempt from the Medicaid spend down. These assets have liens applied by Medicaid where the cost of care is paid after the patient, or couple passes when these items are sold or are transferred to a beneficiary. A farm property that is not the primary residence would have to be spent down as part of the process as it is not exempt.

Angel
Helpful Answer (1)
Report

This question has been closed for answers. Ask a New Question.