Land Deed Help

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Land Deed Help

My Grandfather has 140 acres in Iowa. My father and his siblings names are on the
deed to this land. My father, in South Dakota, is in a care facility. Because of
the value of the deed, we aren’t able to get the state to pay for his care which
we absolutely are in NEED of. Is there a way to get my dad’s name off of the deed
and his children’s name on it without buying it? We need the deed out of our
dad’s name. I read about a Quitclaim Deed would that be helpful in our
situation? Thank you.

Asked on January 3, 2019 under Real Estate Law, South Dakota

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 2 years ago | Contributor

The problem you have is that ANY transfer of property, including by quitclaim deed, which is not for fair market value can be considered a transfer made to defraud Medicaid/the state--people don't normally give up valuble property for nothing, after all. If you father takes his name off the property, that will in essence transfer his share to other people--he is giving them is chare of the property. If the land is $10k/acre and there are 140 acres, then the land is worth $1.4mm. If there are, say 5 owners (your grandfather, your father, and two siblings of your father), then each one's share is worth 1/5th of $1.4mm, or $280,000. Taking his name off in their favor essentially gifts the other owners $280k, divided amongst them. Or if he quit claims it to his children, he is gifting them $280k, divided among the children.
Since again people don't usually give up that kind of value for nothing, the law treats this as a fraudulent transfer: a transfer made to hide assets from Medicaid which, let's face it, is what you want to do. Giving assets to family for nothing is a transfer the law is very suspicious of and it can be reversed or undone--that is, you can't keep the land from the state by giving it to free (or at a very reduced cost) to relatives or friends. Only a sale for the actual value of the asset will be allowed, since then your father gets an amount of money equal to his share of the land--he hasn't given anything away. And he'll have that money to pay for his own care, and will have to use it to pay for his own care.
If your father needs care, you can't just put the land in another person's name without them paying for it--that's exactly the kind of transfer the government looks for and looks to invalidate.
You will have to either 1) sell his share of the land--if not to you, maybe to the other owners; or 2) sell the land to third parties, each owner getting his/her share of the proceeds. Those are your only options at this point.
Years ago--more than 5 years ago--you could have done a transfer: Medicaid, etc. only "looks back" 5 years to invalidate suspect transfers. But you have to do the transfer well in advance, before you need the care. If you wait until care is needed, it is too late.


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