I need help signing over part ownership of a farm to another person.

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I need help signing over part ownership of a farm to another person.

My grandfather who passed last
year has ownership of a farm in
nebraska that since his passing
moved to my grandmother who is
89 and has suffered a stroke.
Because of this she no longer
qualifies for medicaid and i
think it would be better if the
farm was signed to her daughter
my mom that way the farm is no
longer a concern

Asked on February 28, 2019 under Insurance Law, Colorado

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

If she transfers the farm (or a share of it) for less than the fair market value, then if she needs Medicaid within the next five years, Medicaid (or the state agency administering it) can "set aside" the transaction and treat the farm (or portion/interest in/share of it) as still being hers. The law doesn't let you transfer assets to hide them from Medicaid; transfers within the five-year "look back" period can be examined to see if they were likely done to defraud Medicaid by hiding or moving assets. 
If something is sold for its fair market value, the transfer is not fraudulent and the money from the sale or transfer is available to pay for medical care. But when something is transferred for less than its worth (especially to family), the presumption is that the transfer was done to try to protect the asset from Medicaid--and so is a fraudulent transfer which can be set aside or undone.
So, say the farm is worth $500k (note: I have no idea what a farm goes for, so if this number is off-base, I apologize). If the whole farm were transferred to her daughter, unless your grandmother receives $500k (give or take) for it, if she needs Medicaid in the next 5 years, Medicaid could undo that transfer. If her daughter is to become a half owner, then your grandmother should receive in this example $250k, give or take. Etc.
You can't simply quitclaim it without the daughter paying her mother for it, unless that is done more than 5 years before Medicaid is needed.
Now, the transfer could be done for a bit less than market value because your grandmother would be saving the cost of marketing it, a realtor's commission, etc. Probably a transfer to family for up to 10% under market value is defensible, but not more than that.


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