Last year my mother gifted property (which she had purchased for $1.00) to her granddaughter. How would Medicaid calculate the value of this?

Probably the property value used to calculate the property tax. How long ago was the property purchased for $1.00?

As above stated- property value tax assessment. I don’t think there is any way around this. The house will need to be sold and the money used for your mother’s care.

That's the nub of it, isn't it? - when did your parents buy the dilapidated property from your grandmother for a nominal sum, what has been done to it since, and therefore what was it worth at the time that your mother gave the property to your niece?

I'm hoping that it isn't now a very nice property which your niece has set her little heart on living in. You had better explain to your niece that a proper market evaluation needs to be done on it; and also explain to her what will happen should your mother need to apply for Medicaid within the next four years.

But Medicaid is interested in the value of a person's existing assets, not their original investments.

I mean, when you think about it, supposing that were to cut both ways? Your second car may be worth buttons now that you've had the odd misunderstanding with the garage door and filled it with dog hair and driven it cross-country with all your daughter's college furnishings piled on its roof rack, but its list price was $45K when you bought it...

Medicaid will value it at Market Value. They don't care what u paid for it but what its worth now. Taxes are not based on Market Value. Its an assessment which is usually lower than MV. You could pay an assessor to value it? Then you at least have an idea. I think it will be considered in the 5 yr look back.

well, the place was in awful condition when my mother gifted it. it has since been rehabbed however I'm not sure that at all matters. I think there's a five yr. look back and that's about it. My mom now claims at age 90 she'd like to start saving for nursing home care should she need it. This is what I'm dealing with. After two weeks of taking care of her in her home I already need a break. How do people do it 24/7?

Oh crumbs.

Well, is your niece, being of Generation X or whatever they're called by those in the know, as keen as they all seem to be on taking pictures of absolutely everything?

Hoping she's got several megabytes of Before and After pictures. Because - I'm sure you're way ahead of me - what has to be done somehow is a valuation of the property at the time when your mother gave it to her.

"Come what come may, time and the hour run through the roughest day" - if you're tired and stressed you'll do better to look at this again over the weekend and work out some numbers then. Better to add up the worst case scenario if only so you know what it could be.

How are you doing in yourself? And how is your mother?

This transaction would indeed be part of the 5-year look back for determining Medicaid eligibility. Medicaid would look at the market value of the house, then consider that as the amount of the gift. You need a couple of numbers to do the calculation, but you can do the calculation yourself. Since Medicaid is overseen by the state, you need to know what the the state determines as the cost of a care facility, say a nursing home, and you need to know the market value of the home. In my state the average cost of a nursing home has been determined to be $7,828/month. If the market value of the house was $75,000, you've got 9.58 months that your mother would not be eligible for Medicaid. But, if your mother has other assets, say her own home and an annuity/savings account, she would have to "spend down" those assets before applying to Medicaid anyway. Let's say her current home is worth $150,000 and she has a savings of $50,000 -- she has $200,000 (25 months of living in a care facility that costs $8K/month) to spend down first before applying for Medicaid. Longevity is a crap shoot, so the granddaughter's gift may not enter into this situation anyway.

The value of the home when gifted. That may be the creative answer. What did the county assessor value it at the year it was gifted? Then what was the value after the repairs? Hopefully daughter got building permits, etc which would trigger a new valuation. Otherwise call assessor, apologise profusely, and ask for reappraisal. No charge to have that done and county appraisals are rather conservative.

It would be a very good idea for you to consult an elder care attorney familiar with Medicaid rules in your state. There might be options for you.

If you can prove the purchase price was $1 - make sure to give the proof to Medicaid.
If problems occur, get in touch with an Elder Attorney.

Hi.. maybe im misunderstanding this query, but she can have a home. My folks have a one million dollar home, no money over $2000, in accts, & a car. They both have been on Medicaid for along time. This one dollar home is just that. Gifted. Before Medicaid?
I don't know how anyone can be held responsible for Acts prior.

Redbird1, that is not true. This falls under the 5 year “lookback” period so the nursing home or Medicaid can come after the asset.

Salutem - it’s going to be layers of issues for Medicaid should mom apply for LTC Medicaid. I think you should talk with mom & Sis ( perhaps with Sis first) about mom getting with an elder law atty next mo in a January that is NAELA or CELA level to lay out options as to how to deal with the obvious issues for asset transfer. So you’re doing this all proactively.

personally to me, you & Sis have to totally forget “but but but it’s only $1.00”. Good luck to get mom to break that thought...... Folks often sell property for $1.00 or $10 as a transaction is required to have a minimum value in order to be considered “legal” to be recorded. That sold for price is not it’s assessed value. Tax Assessor has placed a value on the land and it’s improvements (aka the house). The tax collector (assessor/ collector maybe different departments & heads within country/ city government) has sent out bills based on that value. To get around this would be you as the property owner do a hearing during contention period ( usually in the spring - mid summer) to get assessment reduced with documentation as to why it’s less. You can get it inspected and appraised and take these items to the hearing to establish why it should be less. Take pitiful fotos of the property. Otherwise it’s set at the assessment for tax collections.

Find the old tax collector bills and it should have an overall tax bill and then broken down as to the 2 parts. Hopefully there is a wide gulf of difference from the value of what your mom gave granddaughter and what it is appraised at now that it’s legally titled in GD name and owned by GD.

If its not, things are going to need to be done to show why GD now renovated $$$ home was not the home $ gifted by Grannie. It will not be simple. And GD may not be at all happy as she’s expecting to pay a tax bill based on what grannie paid and now it’s like quadrupled+ as it’s basically a totally renovated property. Like GD doesn’t want tax assessor to know there’s a new kitchen, bathroom, etc. add and IF building permits haven’t been pulled and some stuff done on the down low, GD is really NOT going to be happy.

If GD isn’t your child - it’s Sissy’s- there could be friction btw you & Sis on this.

Also when your looking for old tax bills, if you run across old homeowners insurance policies, get those to. They too should have a wide gulf of what the insurance was. Mom’s crappy old, decades of delayed maintenance house should have had significantly lower coverage as opposed to GD totally redone house.

If house should be in an area where land values are high, that will be super hard to get reduced assessor/ collections bills. Land value is flat just fixed..... getting around that imo too hard to do for average property owner. Like you’d have to show that it’s part of or abuts wetlands or has limited egress to get past the laughter at the hearings.

There are times when I so wish that AC could tag a new question so we all could read or RE-read prior answers, this is one of those. The original posts from Salutem in Sept are very insightful.

The property appears to have a 250k value.
its unclear whether 250k is:
A. assessor figure from last yr that grannie owned & paid taxes on
or
B. since the transfer to GD and based on new renovated value based on various permits pulled. Most places require the permit seeker to put a value on the project.. like roofing co gets permit for 30k replacement, or electrician files for 20k new to code wiring, Smith construction 85k for 1,000 sq ft addition. So assessor knows what the changes are.

If it’s A, property could be worth oodles more in value for GD. So to me it’s super important that the older lower value be able to be verified. Cause that’s what the penalty will be based on.

If it’s B, and if GD didn’t get proper permits done, so all properly filed down at the courthouse / safety & permits, this is even more issues.

Salutem, with the holidays approaching, can you possibly have time to find out what exactly has been recorded at the CH? There needs imo to be a family meeting regarding for your mothers care and paying for it. Between the stress of 24/7 caregiver shared btw you & Sis and your worrying about your own financial insecurity if mom has to go into a facility, your going to crater. The last posts were about waiting a yr to do anything so it wouldn’t affect taxes, which I assuming was coming from GD and the estate planning attorney (not a Medicaid elder law atty); so now the line being touted is “it was only worth $1.00, so not an issue”.

I’ve got to ask..... Whose child exactly is free house GD?
Why this kid to get grannies house vs. other relatives?
GD parent is not the other caregiver sibling, right?

salut: With that many questions, you'd do yourself a favor by hiring an elder estate lawyer.

Ok I do understand where you are coming from. I have just gone through a similar situation that was just settled last month. I have been divorced and living with me mom for many years. She signed her home over to me on October of 2014. Entered a NH this Spril due to increased dementia and other health issues as well. Medicaid has a 5 yr look back period. First you definitely need an elder care attorney. My mom had nooo savings and I ended up paying 13000 out of my pocket to get this settled. Thank God it worked out in my favor, with such an incredible amount of stress. I’m on New Jersey and the NH is 11500 a month. She maxed out her time with Medicare and her secondary insurance on Sept 5. Would not be eligible for managed long term care Medicaid until spril 2019. This meant sell the house at market value, and give the NH the money, than I would need to find somewhere to live, or take out a 100000 home equity loan to pay the facility in order to keep the house. Well in the past 2 years, I spent 65000 of my own money to fix the house up like new. I was prepared to take out a loan as losing it to a nursing home was not an option for me. To your answer, now. You said you and your sister have been taking care of mom???? An elder care attorney can help. Your niece could put the house into her moms name. This way if on the next 4 years she needs skilled nursing, your sister can say she was moms primary caregiver. This is an exemption for Medicaid. It is a ton of paperwork, and a lot of stress, and the lawyers fee. In the end I prevailed. So 13000 for the attorney vs. a 100000 grand loan is a huge difference!! BTW New Jersey is the second most difficult state to prove this exemption. My attorney was a shark!!! I wis you all the best of luck and will pray for you.

Clou - your folks did NOT actually own a 1M home.
That Trust - which is its own legal entity- owned the home. The atty was - I’d bet a case of Prosecco - totally able to quash a claim by CA Medicaid as your folks had no asset to which the state could affix a claim against.

Somebody did really good medicaid planning in your family!

From what I've read I need a 'certified elder care lawyer' which I am having some difficulty finding. So, I am planning to call the Phila. Bar Association which gives free referrals to local attorneys specializing in the need you have.

Yes I’m totally aware of this. The courts approved that i was the primary caregiver so they cannot come after the house ofwvwn after she had passed

My understanding of Medicaid Laws say that the home has to be sold for "Fair Market Value."

My understanding in my state is that transfers to family members in the 5 year look back period can be undone by the state and the property sold at market value. Another option the state has is to place a lien on the gifted property that must be paid before any future transactions can occur. To avoid getting the transaction rescinded or a lien placed the gifted family member must pay full market value at the time of the gift to support the elder's care.