My parents have a revocable trust with a producing Oil and Gas rights. They will need to sell this in a couple of months to get on Medicaid. They would like to keep it in the family as it is producing gas in Stevens County Kansas. The income from the last 5 years is as follows… 2019- $4900 2020- $6200 2021- $3300 2022- 10,800 2023- $5300 My parents reside in Nebraska as do we. Yes, it’s unfortunate that they did not have an irrevocable trust. If we want to buy it from them how do we determine a fair price? Do we need an attorney? We don’t know if this would be a smart investment for us or not since it is not as profitable as it was years ago. How do we determine a price? Thanks so much!
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Where I live, anything that they sale under 4 years (and it might be 5) counts against them with Medicaid and makes them ineligible until the time is up. Something like that anyway. I could be wrong but that’s the way it was explained to me.
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A fair price is hard to determine. Have they received any offers from mineral companies to buy their interest? Most companies pay 3x on most recent production, so in your case about $15,000.00
I’m not licensed in Nebraska, but in a similar case in Oklahoma I had a client who’s mineral interests made her over-resourced for Medicaid purposes. We fixed the problem by:
- Valuing the minerals (Nebraska may have a formula for Medicaid valuation)
- The applicant transferred the minerals to children (none of whom were POAs)
- The children signed a Medicaid compliant promissory note to repay the parents.
This is where an elder law attorney familiar with Medicaid promissory notes is needed. The result in my case was that the children became entitled to the royalties which more than offset the repayment terms.
This post is not legal, tax or investment advice. Reading or responding to this post does not create an attorney/client relationship.
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Have Medicare A & B, a part F policy and have a drug policy!
We have used an elder law attorney to arrange our assets to manage issues like this. I believe Medicaid is a state administered program. So, I expect you need an attorney that is familiar with your state’s laws and provisions. While it is better if you had this done 5 years ago, according to our law firm things can still be done. I am not an attorney and am just sharing my experience. Best of luck!
Visit with an Elder Law attorney in Nebraska. In the scenario I outlined the transaction would not be subject to the 5-year lookback because the exchange was for something of value, i.e. minerals for promissory notes.
By the way, Oklahoma values at 3 X annual production. Different valuations for non-producing minerals.
This post is not legal, tax or investment advice. Reading or responding to this post does not create an attorney/client relationship.
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This has to do with Medicaid, NOT Medicare. Medicaid recipients have asset/income limits.
Those are good to have, but Medicare does not pay for long-term skilled nursing.
There is a limited “rehabilitation” benefit that is sometimes available after a 3 day hospitalization. It pays 100% up to 20 days if the patient needs therapy, is improving and doesn’t plateau in recovery. 21-100 days thereafter the same requirements, but there is a hefty deductible that some Medicare supplement policies cover.
Medicaid is a complicated area of the law, that is why so few of us work in it.
This post is not legal, tax or investment advice. Reading or responding to this post does not create an attorney/client relationship.
Thanks to everyone replied! I will try to find an elder care attorney here in Nebraska. I truly appreciate all the help!
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