--West Virginia resident.

--Mom in nursing home but paying privately right now. Will make application for medicaid when assets are spent down--probably about six months.

--Car is worth about $4,500.

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Her home and a car can remain an exempt asset for the rest of her lifetime for Medicaid. She cannot gift or transfer it without that action placing a transfer penalty on her Medicaid application.

Whether or not to keep it makes sense, to me, is really interdependent on honoring her wishes to keep a home/car AND families ability to afford all costs associated with a car or a house from day 1 of medicaid till after she dies as you then will be dealing with it as asset of her estate. Cause upon death it goes from exempt asset to nonexempt asset of her Estate which will mean some sort of filing in probate court to deal with her estate & transferring the car ownership and deal with Medicaids estate Recovery (MERP). Dealing with MERP is not simple and can get pretty involved in dealing with heirs & exemptions / exclusions to Medicaid’s Estate Recovery program. House can make sense to do if there’s a pretty good expectation of exemptions but a $4500 car may be more of a total bother over time.

Its her car, so the insurance still has to be in her name. But you will be responsible for all car costs...... insurance, inspection, maintenance, etc. Really you need to add on additional drivers & could have costs to do.

If she / you decide to keep it and then say a yr after she’s gone onto LTC Medicaid, you find that you simply cannot afford to pay its costs or get really over having it around, and you sell it, that sale will likely take her assets over 2k and make her ineligible for Medicaid. So she has to go Back to private pay and then reapply for Medicaid...... unless you can be really clever & timely to get it sold and do a legit spend down on things she needs within the month of the sale (like funeral preened), otherwise you’ve screwed the pooch for her Medicaid eligibility for at least 2 maybe 3 months.

Personally on a car, I’d sell it Blue book FMV and like now before ever applying for Medicaid. So it neatly folds into the existing spend down.
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No gifting allowed. The car can be sold for fair market value and the money goes towards moms care.
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