Are there any benefits or ramifications of my Mom giving versus selling for $1 her car to her grandson?

MMB - well it's good you are aware of Medicaid's transfer penalty. Most folks get blindsided when it happens. So between worthless' 12k and kids car...it's 15K?That's really quite low & not like gifting a house which seems to be the usual snafu. You may want to Google to find out what your states Medicaid program pays for the daily room & board reinbursement rate. Like for TX it's about $ 155 a day which is one of the lowest rates in the US btw.

Knowing the rate will enable you to figure out what the penalty period will be & plan for. The formula is not just the $ amount per se but the reinbursement rate over time. So for TX, 15K would mean about 97 days of private pay to work out penalty. BUT if her state reinbursement rate is $ 325 a day, it's only 46 days.

Hopefully you can get worthless to pay this.

Moms screwed anyway with regards to the look back for Medicaid (if it were a necessity) bc my trifling brother "borrowed" and never paid back up to $12,000 from Mom. 😤

The car is worth between $2000-$3000. Moms assets are a bit too high for Medicaid. But I think we should have the dealership give us documentary valuation of the car.

Maybe it depends on the state. When mom and dad moved here, she was able to give dads truck to a nephew that always helped them out, and was poor as a church mouse. Thier state allowed that ( didn;t check out possible ramifications) but truck was only worth about 4000, but was like new with low mileage. So we would have been able to cover that.

Ramifications YES. Medicaid will want the asset accounted for. Let's say the car is worth $4000 fair market value. Gift= $4000 penalty. Sold for $1= $3999 penalty. Don't do it.

Get the car valued by a reputable dealer. Keep a copy of the estimate on file. If it's a lot of money, then you'd better give some thought to how you and/or your son are going to cover it should your mother need those funds in future (or should they become relevant to a Medicaid assessment). But if he's able to maintain and insure it? - which is usually the major cost with a second-hand car - then presumably he'll also be able to save up some contingency money too. Which would be no bad thing, even if it does just wind up as a handy little nest-egg for him.

I'm not sure I understand the symbolism of the "peppercorn" purchase? How is that better than his grandmother generously giving him a car and his being duly grateful?

Freqflyer is spot on about medicaid. Remember real property ownership on house, land, cars is noted by the tax assessor so the records are known.

If Medicaid could become an issue down the road, gifting would likely be set at whatever the BlueBook value of the car is. If BBV is low enough not an issue, but if the car has value that combined with moms $ assets takes her over the 2K allowd by most states in assets, it will pose a transfer penalty by Medicaid. If the car has issues - like it has body damage, transmission is out, etc- you kinda need to have that documented by photos and paperwork from mechanic to be able to prove lower value IF it becomes an issue for Medicaid.

My mom gave her old old behemoth of a Buick to worthless nephew when she went into IL. Then when she went into a NH 3 years later, the car was brought up by the caseworker. I had to get a statement from the mechanic as to the status on the car. I was lucky in that these guys have been there forever, both mom & dad use them & they remembered her & she kept all old paperwork on repairs.

5 years = 2021 if mom applied today. It's a long time to keep documentation.

Are you concerned that your Mom might need to apply for Medicaid within the next 5 years? If yes, then Medicaid would feel that Mom had gifted the car to her grandson even for $1 and that would count against her. Depending on the year, make, model, mileage, and condition of the vehicle, Medicaid would use the dollar amount what that vehicle would have sold on the open market.

I see from your profile that your Mom is in her 80's and has Alzheimer's/Dementia so unless she is wealthy, Medicaid might be in her future should she need to live in a nursing home facility.