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"Can his mother gift him money or land without legal ramifications if she should need a nursing home down the road? "
If by, "legal ramifications" you are referring to the possibility that she will require her nursing home expenses to be paid by Medicare, I would have to say that there might be such a possibility. This is due to Medicare's "5-Year "Look Back" rule which basically provides that if an individual makes a gift of some or all of their property within 5 years of needing Medicare to pay their nursing home expenses, then the transfer of that property will be reversed and made available to the recipient of nursing home care so that Medicare will be paid.. Applying this rule to the situation you described between your husband and his mother, if she incurs nursing home expenses which are paid by Medicare because she does not have the funds to pay for her care, the transfer of property to your husband will be reversed. They do not take into account the health of the recipient of the gift, they consider only the date that the transfer was made and if it was within 5 years. Therefore, unfortunately, your husband's health would not be taken into account in Medicare's determination,
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would the 5 year rule apply to Medicare payments to a nursing home or to Medicaid payments? Also if my husband was to sell the property to pay his health expenses could Medicare (or Medicaid) still take the land from the current owner or would they go after my husbands estate? Lastly, if my husband were to die before his mother needed nursing home care paid by Medicare (Medicaid) would the rule still apply?
Thank you for your follow up question, Kolette, and the opportunity to amend my previous Answer completely, so please disregard my previous Answer. Please accept my apologies, maybe I've been staring at the computer too long today.
1. I was referring to Medicaid, but I was incorrectly typing 'medicare' when, in fact, medicare does not enter the picture at all. So, your husband and his mother would only be dealing with Medicaid issues.
2. A transfer of property to your husband by his mother as a gift will not have to be reversed. What happens is that the person making the gift, in this case, your husband's mother, will be disqualified from receiving Medicaid benefits if the gift was made within 5 years of his mother's needing Medicaid to pay for any nursing home care expenses she might have. The amount of time during which she will be ineligible to receive Medicaid benefits depends on a couple of factors which I can explain better by giving you an example using arbitrary numbers.
Example: Assume an elderly parent made a gift of land to their child. At the time that the gift was made, assume that the fair market value of the land was $100,000.
Assume also that in the State in which they lived, the average monthly cost of nursing home care was $5,000. Two years after the gift was made, the parent needed nursing home care and applied for Medicaid benefits to pay for her nursing home care. If the parent had not made a gift of the land to her child, she would have had $100,000 to pay for her nursing home care expenses. at the "going rate" in their State of $5,000 per month. The parent could have paid for her nursing home care expenses for 20 months if she had not made the gift. Therefore, Medicaid would disqualify her from receiving Medicaid benefits for 20 months, as follows:
Value of the Asset the parent would have had = $100,000
Average cost of nursing home care in their state = $5,000 per month
Therefore, dividing the value of the asset (if she had not made the gift) by the monthly cost of nursing home care in the hypothetical example would equal 20 months. So, the parent would be ineligible to receive Medicaid benefits for nursing home care costs for 20 months.
2, Your husband could sell the property and do whatever he wanted with it. It is his mother whose eligibility is affected;
3. Lastly, you asked, "... if my husband were to die before his mother needed nursing home care paid by Medicare (Medicaid) would the rule still apply?
The same rule would apply. The "Look Back" rule is applicable only to his mother because she is the Donor (The person making the gift) who would be affected. Your husband's eligibility for Medicaid is not affected at all because he was the Donee" (The person receiving the gift). Only the mother would be temporarily ineligible for Medicaid benefits
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