LTC – Medicaid – Land donation

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  • #4144

    cromero002
    Participant

    I am looking for info about the donation of land and a relative’s Medicaid eligibility as a resident in an LTC. It has recently been discovered that this relative is part of a family donation of land and their niece is asking for her part to be separated from the family’s plot of land. If the relative signs the donation (along with all the other relatives on the deed), could this negatively impact their continued Medicaid eligibility as a resident in an LTC? There is no financial clause to this donation merely separating a piece of the property for the niece to use as collateral for purchasing a home.

  • #4146

    Lex
    Keymaster

    Sorry, I missed seeing this post until now.

    The folks at Medicaid can be unpredictable as to how they might view a particular transaction.

    If property is an exempt asset, like the family home, then alienating the property in any way could be considered converting an exempt asset into a countable asset. For example, you donate your home worth $200,000 to a relative. That exempt asset (the family home) is now a cash asset which has no exemption. Medicaid at that point would terminate eligibility and would tell you that you have to “spend down” $200,000 before you become eligible again.

    So, if you aren’t talking about donating the family home but just some other property in which she has an interest, then it should have been considered an asset when she applied for Medicaid. If it was not disclosed as an asset, then there could be a problem. It could also be that the partial interest was disclosed, but Medicaid might have considered a partial interest with several co-owners as having no real value. It is hard to say without the details, but it would never have been considered exempt so donating it should not matter. Again, it depends on the details.

  • #4148

    cromero002
    Participant

    Thank you for the information. It’s not the family home that is being donated only a portion of a family plot of land. I’m not sure if the land was disclosed in the Medicaid application when they entered LTC as the facility completed the application. What other details could I provide as I’ve reached out to an Elder law attorney but it’ll cost $1000 for 2 hours to meet with her and I’m not guaranteed they could answer this question.

  • #4149

    Bassmaster
    Participant

    I think Lex included some discussion about the family home so that people reading this thread understand that some things can be exempt from being a countable asset for Medicaid purposes.

    As to your specific question, if someone is getting a portion of their own land, then it is not a donation. This is usually done by a partition where the co-owners stipulate who owns what and the specific, defined, portion (which is either known or a survey is done). Nobody involved is gaining nor losing anything. The niece gets a defined portion of her own property while the others still have undefined portions. The only argument as to value is that the niece technically has a more valuable share since it is now a defined portion rather than an undivided interest in the whole.

    The bank is requiring this, by the way, because they cannot easily accept a mortgage on co-owned land unless all co-owners become liable on the loan. I’m sure they don’t want that.

    Is this making sense? Whether or not the partial interest in the property should have been disclosed, or whether it was actually disclosed, is a moot point at this stage. Again, the bank may have said “donation” but when it gets to their legal people, they will probably want it done by partition. I’m not sure how an elder law attorney can add much to this.

    Assumed facts:
    1) Several people own undivided interests in a piece of property.
    2) One of the several people want a loan and the bank requires a specific ownership of property, not co-ownership.
    3) Through an act of partition or otherwise, one person ends up with a specific piece of the land while the others stay undivided owners of the remainder or define their own separate portions.

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