In this Elder Law Minute, Kaye Dent explains how farmland is not exempt for Medicaid purposes and why it’s important to have proper planning in place so that your land is protected.
Hi, I’m Kaye DeSelms Dent with Dent Coulson Elder Law here with an Elder Law Minute for you. These videos are intended to educate you about the Elder Care Journey which begins earlier in life than you might think. We hope that you find them useful, and if you have further questions, please call us at Dent Coulson Elder Law.
In another Elder Law Minute, I discussed that farm families need custom planning. One of the biggest reasons that we see, of course, in our elder law practice is that farm families need to be concerned about how to pay for the cost of long-term care and also keep their farmland. What many people fail to understand is that farmland is not exempt for Medicaid purposes. Let me explain that a little bit. In Illinois and, frankly, in most of our country, many people who need nursing home care will either immediately or eventually rely on the Medicaid program to fund that nursing home care. Under that program in Illinois, certain assets can be kept as exempt, but most assets are not exempt, and that includes farmland that is not immediately contiguous to the homestead beyond a certain value.
This is why farm families need to be concerned ahead of time to protect the land. If it’s not properly protected at least five years in advance of the need for care, it’s possible that the family could be forced to sell some of the land. This is very disadvantageous because capital gains tax are involved, and those can be pretty hefty, so money’s lost there. Also, in some cases, the family may say, ‘Well, somebody can buy it.’ The problem is that to avoid it being considered a gift anyway, the land has to be purchased for fair market value, and the average person doesn’t have a lot of ability to afford farmland in our area these days.
The bottom line is that the nursing home cost could mean not just loss of the land and money but of the family heritage and the succession that’s intended. Another thing to remember is that even for exempt assets, income produced by those assets, such as the homestead that’s contiguous to a bit of farmland, has to be contributed to the cost of care. So if there’s a spouse at home, the spouse at home might be losing out on income. This is just a very short overview of the issues that farmers face when planning for long-term care. However, there are some pretty tried and true solutions to these issues, and the attorneys at Dent Coulson Elder Law are here to help you find a solution for your unique farm situation. Please give us a call.
Also looking for information about Medicaid and Asset Preservation? Visit these articles:
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Dent-Coulson Elder Law is dedicated to providing families in the St. Louis area with their Elder Law needs. Our practice areas include Asset Preservation Planning, Veterans Benefits, Medicaid Eligibility, Alzheimer’s Planning, Special Needs Planning, Estate Planning and more. We understand the financial challenges you may face as you and your loved ones grow older. At Dent-Coulson Elder Law, our clients’ well-being is our number one priority. For immediate help, call (618) 632-7000 (IL) or (314) 567-9292 (MO), or Contact Us and we will get in touch as soon as possible.