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My father has a few bucks left but will soon need medicaid. My father is in a PA nursing home, he is down to 38,000 in his accounts. He can keep 8,000 cash which puts his cash and total assets to $30,000. I was told today by an attorney that we should buy a car for around 30k in his name which would make him eligible for Medicaid immediately. One month after he is on Medicaid we can transfer the car into my name and not get penalized. Does this make sense and is it legal?

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Some states follow the rule that a transfer of an exempt asset (e.g., a car) is not a penalty-causing gift. (Note: Even in such states, a transfer of the home, normally exempt from Medicaid, will indeed trigger a penalty.) What the rule is in your state I have no idea, so if you really wish to be sure about this, you would need to check with your state's Medicaid department.

If you are nervous about an attorney's advice, it is within your rights to ask the attorney (i) if he or she has successfully used a particular planning technique, how many times, and how recently (states change their rules), and (ii) if he or she can make a copy of the state's applicable statute or regulation that permits such a technique. No reputable attorney will be offended by the foregoing.
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Aero, I would get a different attorney. Under Medicaid dad is allowed a home and a car. But if sold or given away for less than market value there will be a Medicaid penalty equal to the amount of the gift.
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No, no, no!!! Even if it passes the original Medicaid application, the transfer will show up in the renewal and you will end up with transfer penalty, possibly fraud charges, and your parent will lose Medicaid. Also, if elder is going into nursing home and not driving, it will raise red flags with Medicaid case worker if there is a sudden purchase just before you apply for Medicaid. You may not get Medicaid immediately, and they will look at transactions not only up to 5 years back but frequently up to 6 months later.
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Will your father benefit from the purchase of the car? If so, why do you need to transfer its ownership? - just assist him to buy a car. If not, although I can't comment on whether or not Medicaid are wise to this loophole, I would call it financial abuse - you would be using your father's money to buy yourself a nice new car.

So legal: I wouldn't know, but it sounds pretty dodgy to me. Make sense: not really. How does it help your father? At best you would succeed in conning Medicaid into making good a $30K deficit and benefiting yourself in the process.

I think you might want to find a somewhat more straightforward attorney.
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Aeronca, I assume that this attorney is NOT certified in Elder Law. Is that correct? Because the advice is simply not correct. I'm glad you aren't going to do it, but I'm worried about you relying on this lawyer for other advice.
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I'd be also concerned about this atty. info on dads keeping 8k cash. Most states allow NH Medicaid to have a maximum 2k in assets. Now they can have additional $ for funeral & burial. I'd suggest you clearly find out if funds have to be earmarked for this. Usually that means dad pays for a pre-need and it's NCV (no cash value) funeral policy.

States can & do limit the value of exempt assets. Home can be an exempt asset but it has to be under a certain assessor value; for most states its $500/550k with some East coast states at 750/800k. Funeral under 8k or 10k & can be required to be irrevocable NCV. Cars too can have a maximum value. You need to find out clearly what dads Medicaid program allows. If this atty. "plan" is wrong, it's you who will be facing dealing with and paying the transfer penalty that makes dad ineligible for Medicaid.

The vehicle transfer will be recorded at the local level by assessor & dovetail to the states database. It will surface & be found. If it was gifted the value will be pegged at highest Kelly Blue Book value.

At some point - either from an internal matchup search done by your states Medicaid program or from the required reporting for dads renewal - the fact that the car was gifted & transferred to you will be found. Dad will have a transfer penalty inquiry done which you as his DPOA will have to deal with. The NH gets the inquiry letter too & NH will likely require a binding contract done by you in order for dad to remain a resident.

Please, please keep in mind that all this can take time. So dad could be several months at the NH when discovery done. If dad becomes ineligible, Medicaid will clawback payments to the facility (much like SS clawback overpayment when they die within the previous month). NH will come after you for dads debt. If you ignore this, the NH does not kick dad to the curb. But they can & will get dad to be placed as an emergency ward of the state. State can then place dad in another NH; nether you or other family are involved in any of this as you have not done your fiduciary responsibility as DPOA or have ignore the terms of the admissions contract. The wards court appointed guardian is in charge. At 5k -15k a mo, NH cannot let unpaid bills meander on for weeks or months.

Really stuff can snowball into huge problems. Please, please Find out clearly what is allowed by Medicaid or from NAELA /CELA level certified elder law atty.
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Lawyers are no different than people on this forum. They aren't going to be affected by what they say --so proceed with caution. If you don't have access to a certified elder care lawyer better get your answers from your Medicaid caseworker. They're the one who will make the determination of eligibility and have the correct answers.
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Aeronca, the irrevocable trusts that are used to make elders qualified for Medicaid are very specific in nature and only benefit special needs recipients or non profits. in the case of Miller trusts, the excess income is pooled to benefit Medicaid, not the heirs. So, yes, irrevocable trust are Very different.
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If they are an individual on NH Medicaid, all their income less a small personal needs allowance ($35 -105) MUST be paid to the NH as the required co-pay or SOC (share of cost). The PNA really is just enough to pay for barber /beauty shop & some toiletries and minimal clothing replacement. Elder realistically will have no - none -nada of $$ anymore to pay on the home or car that is still in their name and legally still their asset. Family will have to front all costs knowing there is a risk in all this. If its a fully paid off home & car, it can possibly make sense if family have the wallet, sense of humor & don't mind risk for possibly years.

But what seems to happen is that family is all gung-ho for the first few months....then sissy can't pay the insurance, brother stops cutting the grass, you find you can't pay the taxes. If there is a mortgage or car note, a couple of missed payments & it goes into foreclosure or repo situation. Based on posts on this site, within the first 6 -10 months, the dpoa is so over the situation & car / house gets sold; the increased $ due to the sale takes them off Medicaid and they go to private pay at the NH till they once again are impoverished to qualify for Medicaid. & all that $ you & family paid, well consider it a gift to your elder as you aren't easily going to be reimbursed from the proceeds of the sale.

The SOC often comes as a total surprise to families. If family have been interdependent on their elders income (SS, pension) to keep the household afloat often care at home just has to be done - no matter how challenging- as it's keeping a roof over their heads. A most difficult situation for all.

Aeronca - for 30/38k that could easily be a spend down on prepaid funeral burial, new eyeglasses & hearing aids, lots of new study easy care clothing & shoes. If dad needs dental work, that could easily be the entire $$. My mom did a huge spend down in dental when she was in IL and it was so worth it as there is no dental or real ability to do dental appointments once they are in a NH.
Good luck in your decision .
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Was this, maybe, a casual conversation at a party, and an intellectual property lawyer who happened to be there (and knows nothing of Elder Law) made an off-hand suggestion? It doesn't really sound like advice from a paid consultation!
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