What should I do with my parent' car when my farther is applying for Medicaid?

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My Dad owns a car -- it is old but still worth approximately $1,500. He is in the process of qualitying for medicaid. He can keep the car and still qualify, but problem is the car is in another state and his license will be expiring soon as well as the car registration, inspection etc. A relative would like to keep the car, but how can that happen if he doesn't have a driver's license

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Expert Answer
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A driver's license shouldn't affect his ability to sell the car, but the registration is important to prove ownership. If he's going to sell the car, likely he should do it now. Medicaid may want the money, but it's not that much long-term. The best approach if he doesn't sell it now is to contact Medicaid and see what their view is.
Good luck,
My suggestion is to get the current Blue Book value on the vehicle.
That amount is the benchmark for all reporting, should you need it, and if they are going to apply for Medicaid, they/you will need to know the car's legitimate value.
Kelly's Blue Book does this. Make a xerox of the page.

Let's say the BB value is $ 1,500.00.
The car is an "exempt" or non-countable asset as long as it is in their name. As long as they qualify for their states ceiling for "income" & "assets" for Medicaid, having the car doesn't matter. But depending on their states monthly "personal needs allowance", it might be tough for them to pay registration, insurance, etc.
Plus they probably really don't need a car.

If it gets donated to a real charity, the donation can be viewed as a tax deduction.
You kinda need to be careful with a charity donation, as usually people WANT the donation to be over the value as they are taking it as a tax deduction. Like you drop off a bag of old clothes at Goodwill and say the value is $200.00. This is not the situation you are in, you want it on the lowest value.

If it gets donated to family, the value of the car could be viewed as income for the month it gets donated by your states Medicaid program based on the BB value. So if their monthly income from Social Security and a retirement account is $ 1,800.00 mo (& under the 2K income ceiling for Medicaid) BUT the month of donation their "income" could be $ 3,300 (1,800 + 1,500) and disqualified for that month.

But if he were to sell the car for $ 175.00, then he is still below the 2K monthly income and all OK for the Medicaid application. The $ 175 is spent on his care or his needs and documented as such. Good luck.

A lot of this really truly will depend on the BB$.
If it's 5,000 and you sell it for $ 500 then it won't work. It will be a gift of $ 4,500 and they will have a Medicaid transfer penalty of $ 4,500.00. Which means someone will have to private pay $4,500 to the NH before Medicaid kicks in.

What you want is a "fair purchase price" - this takes into account what the car is like - so one that has non repaired accident damage will be different and a lot less in value than the same model driven by an old lady who took it to church and grocery.......You can also look in the want ad's for comparable's. You just need to have documented as to why it's the value you say it is.

Cars you really cannot slip under the radar (LOL) as all the records are in an easily gotten database for Medicaid or other review.
Another alternative is to the donate the car to a charity. Medicaid only allows you to have $2,000 in assets when applying.
Can someone else register a car if they are not the "owner"?
No, you would have to transfer the title of the car to them and then they become the owner of the vehicle.
Also, if they "gift" the car, it could trigger a "transfer penalty" for Medicaid review.

For Medicaid, they cannot have gifted away anything of value during 5yr look-back period. If you do, there could be a “transfer penalty” when items are gifted. Penalty different for each state as it’s based on each state’s NH reimbursement rate. For Texas, it is $ 142.92 a day rate transfer penalty.
Could the car be "sold" for less than the BB value to a relative or would that still be deemed a "gift"?
Can I keep my car on Medicaid?
As I understand it, you are entitled to keep one car registered in your name.

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