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Can Medicare come back and claim fair market value on a home sale?
Anonymous5 views3 answers
Mother in assisted living now. Niece would like to buy her home but has to do a rent-to-own for approx. 1-2 years. Will sell home for $30,000 but may be worth $50,000. Mother does not have many assets so if she needs nursing home care any time soon, can Medicare come back and try to get the additional $20,000 from the home if it's within the 5-year look back period?
Medicare doesn't fund nursing home care but Medicaid does. If the house is sold at a discount to a relative and seller applies for Medicaid in the next 5 years, Medicaid can impose gift penalties unless the sale is exempt. In other words, your approach would be really, really risky if you don't know what you are doing. Instead consult an elder law attorney and do it right.
Larry is right in cautioning you to see an elder law attorney first. In some jurisdictions, entering into a "rent-to-own" agreement would be taken as evidence that your mother does not intend to return home. That could disqualify the house from being considered as an exempted asset. An experienced elder law attorney who does Medicaid planning should be able to advise you on how to achieve the goal your mother seeks.
