Henderson, TN asked in Elder Law, Estate Planning, Land Use & Zoning and Real Estate Law for Tennessee

Q: For nursing home care will Medicaid look at the purchase of two plots of land individually or together for FMV?

I am purchasing two plots of land from grandfather. Each plot has a tax assessed value of roughly $22,500, totaling $45,000. My family is using this number to determine fair market value. I have purchased one plot already with a $35000 mortgage loan to secure better interest rate and terms. My plan was to purchase the other plot of land with a $10,000 personal loan, thus totaling the $45000 the plots are worth. My concern is, will Medicaid look at the total sale price of both pieces of land as $45,000, or will they look at them individually and conclude that the plot purchased for $10,000 was sold for $12,500 under market rate?

1 Lawyer Answer
Nina Whitehurst
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  • Estate Planning Lawyer
  • Crossville, TN
  • Licensed in Tennessee

A: Your question is very astute. I assume that you are concerned about this from your grandfather's perspective rather than your own, though you did not say one way or the other. The chances are good that Tenncare will look at this as two separate transactions because it sounds like they are taking place separately on separate dates using two separate deeds. So it will appear to them that he was overpaid for one lot (and they don't care about that) and he was underpaid for the other (which they will look at as part sale and part gift). The gifted portion could trigger a penalty period if your grandfather applies for Tenncare long term care benefits.

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