Should Medicaid recipient just park her car and keep it?

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My LO has a car that is excluded for purposes of qualifying for Medicaid, It's an old car and only valued at app. $2,200.00 She is disabled and will not be able to drive this vehicle. The liability insurance is about $33.00 per month, plus inspection costs, registration, etc. And she only gets to keep about $66.00 per month from her disability check, so as her POA, I wanted to either get rid of the car or park it and cancel the liability coverage. (She's in AL and they provide her transportation.)

I realize they will do a review of her situation in about a year and if there is a sale of the vehicle, they will question the proceeds. It's not enough money to risks messing up her Medicaid qualification, so, I'm inclined to just leave it in the garage and cancel the liability. Has anyone done this?

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OMG. Igloo572, Thank you. I'm going to have to read your post above numerous times and take notes. I will check out all you suggest. Good stuff. I've got to get some more notebooks.

Ref. the house. It belongs to my second cousin, not my mom though most people think I'm her daughter, (she's 63 years old) but we were close and I am the only family member or friend who has helped her. My parents and I helped her when she fell and broken bones on several occasions, running her household, tending to her, taking to the doctor, etc. and my dad did her yard for many years for free.

She has been disabled and on disability for arthritis for about 5 years. The AD was slowing coming on and then she was hit with significant dementia this year. In May it was evident to all, including her doctor that she needed AL. Now she has two disabilities.

. She had signed DPOA, HPOA and left her estate to me in her Will years ago. I'm the RP at the AL and the only one who visits, save my parents one time. I contacted all living family members and friends, but none respond. She has no one left in this world. I promised her mom to look after her when she died.

I happen to know the fair market value of the house and lot is less than the tax value. Should I clear this up or not.

The renovations will not be anything huge, just repairs floor, repair bathroom, replace old hot water heater, paint, replace ancient, dirty carpet. My family will help and help do yard maintenance to keep costs down.

When I applied for her Medicaid, because she had to get into AL, the worker put down that she plans to go home to live when she leaves the AL. Technically, she could if she had someone to take care of her there. The house would be in good shape and her room will be waiting, should some miracle happen and she recovers from the AD, but I don't think that will happen.

I have another wrench to throw into the mix, but will wait until something concrete happens. There may be a gas power transmission pipe that comes through the property. I know. I almost fainted. I'll post about that if and when we get the final word on that.

Thanks again.
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Sunny - yeah I'd get the mechanic estimate for the work; estimated on the cost of the windshield and other hard costs (like the AC); then look up the current BLue Book on the car (the library will have this) and make a xerox on all. Then deduct all and do a bill of sale with all of this line itemed on it. Keep the bill of sale to 1 page though. If the car insurance is the same vendor as the house insurance, then I would try to sell the car the month the car insurance lapses. Why? well you don't want to get a check with the overage on the auto insurance to come back like 4 months from now and screw up her Medicaid income/asset stuff. Also she maybe getting a reduction for a 2 coverage policy so that too is why to do the month coverage ends. Just easier paperwork.

Buying a prepaid No Cash Value funeral & burial is a good idea. You want to make sure that everything is included that can be. My mom has a NCV funeral but I found out last year when she fell and went onto hospice and we thought she would die (she is still in the NH and is one tough old bird) that there were many many costs that were not included……the vault opening is like 1K+ and not included; police escort FH to cemetery, not included; floral not included.Totally not fun finding all this out when I assumed everything was done, paid, over.

About the house, my mom still has her home. So I try to keep up with all things MERP as it is on my near future to deal with. If you can wait for the full 5 years before applying for Medicaid, that is the easiest and simplest solution. I will say that the whole life estate stuff seems to be a moving target for the state legislatures as to what is allowable under Medicaid rules. For us, life estate is not there but a Lady Bird deed is (mom is in TX). Although that sounds just dandy, Lady Bird can only work if family has the ability to pay the whatever's on the house for the rest of the parents lifetime. For us, it's feasible although not always amusing. Now for us, under TX state rules, if the house is empty then all expenses needed to maintain the home (taxes, insurance, yard, etc) are totally an exemption to the MERP claim against the estate of the late Medicaid recipient. So the receipt for $ 3.98 for light bulbs for the front porch is kept and legit but putting in a pool won't. Comprende? Also I would ask your legal that if you move to the house that it could be a pose a problem for the MERP maintenance exemptions or exclusion (should mom need to be on Medicaid before the 5 year mark). I live in another state so there is no ? on this for us. I keep all the expenses documented just in case there is ever a change on the Lady BIrd total exclusion and also as a claim against her estate for probate for when & if the house gets sold later on.

I would suggest you get an idea of the hard costs on the house too. Go through mom's stuff for the past couple of years and find out just what taxes, titles, etc are running. look to see if this is truly affordable. Also find the tax assessor annual bill. Usually go out in Oct or Nov to be due in January. Review to make sure that mom is getting any exemptions she is entitled to - it technically is still her homestead so you want to keep it this way and get the tax bill so that it is a low as possible. About the repairs……well I'd be cautious on this. Again look at the tax assessor statement to see what they consider the value to be. It will likely be 2 values for the land and then the house (the improvements). Speak with a Relator to see if it could sell for the tax assessor value as it currently is. I'd speak with a couple of Realtors in the area - like drive about with one of your kids and have them shoot a photo with their phone of houses for sale in your mom's area and the Realtor signs. Call those guys. Most Realtors can do a sale proposal for you in a couple of days, you want this to see what realistically the house is worth. You don't - imho - want to spend 50K on repairs if you just flat can never sell the house and recoup those costs. You have to think about your own financial situation and if renovating the house using your money will jeopardize your own retirement. We do minimal on anything interior but do spend on yard maintenance service as it keeps the neighbors happy and the house looks lived in. You want the neighbors to be totally happy with you all and want to make keeping the house work for you. Mom has long-standing neighbors who park in mom's driveway and I pay their kids to pick up the mail and the odd newspapers or door knockers posted and they Fed Ex once a month to me. Everybody benefits.

All this can be overwhelming. Try to make yourself organized. I'm pretty OCD so that is my nature……..I keep 3 notebooks going: 1 for house direct costs; 1 for all things medical including Medicaid stuff; 1 for mom's banking & insurance. Now TX Medicaid does an annual recertification and i have to resubmit many items over & over for the recertification each year (insurance policy stuff, house assessor stuff) along with 4 c urgent months of banking. I have 14 days from the date of the letter to get it faxed to the state too so being organized just makes all this easier and lots less panic and dramarama. Right now all the stores have back to school items in, so go down to Target and get yourself some cute notebooks and expense/receipt holders and get yourself organized so you aren't loco over Thanksgiving trying to find stuff that is due December 1st. Good luck.
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Igloo572, You make some great suggestions. I will look into getting an estimate from a mechanic so I can sell the car. I'll then put the money on something she really needs such as burial. Which is another problem, because she has a $10,000.00 life insurance policy with me as beneficiary for her burial costs, (no cash value at the time,), however, it costs about $40.00 per month and she can no longer afford to pay it. So, I have to pay it. I'm not sure I can do that along with all the other things I must pay for, such as the home owner's insurance, yard maintenance, etc.

If the mechanic confirms it needs a new windshield and air conditioner doesn't work, needs new tires, etc. and the value is less than $2000.00, then may I sell it to a family member? Not me, but another cousin?

Ref. the house upkeep. The house is in my name, but she kept a life estate, 4 years ago. I know, I know, I've read lots about life estates on this site, but I have consulted with 3 NC Elder law attorneys and the social worker handling her Medicaid and they all told me that if she stays out of a NH for another year, they will not look at the transfer and they all tell me that when she dies, it is not a part of her estate, so is not recoverable. In NC when she dies, the life estate dies and is not a part of her estate. I have been told states differ on this. Besides, there is nothing I can do about it now.

I will be renovating the house with my own funds doing much of it with my family's assistance. Needs, painting, gutters, water damage, etc. I will be living in the house from 2-3 nights a week or more indefinitely and paying the utility bills. It is about a 25 minute drive from my primary residence. It has an alarm system and I know the neighbors well.

I would appreciate any other tips, since you certainly seem to know about these things. There is so much to learn.
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Sunny - have a suggestion on the car. Medicaid has 2 $ sections - income and assets. Income limit is set by each state (when I applied for my mom it was $ 2,063.00) and the asset limit seems to be set at 2K for all states (I'm not 100% sure about this) Now income is whatever mom gets each month like her SS and retirement. Under Medicaid rules, it is all of mom's income that has to be paid to the NH as her co-pay or her "SOC" (share of cost) in Medicaid speak. Like for my mom she gets $ 800 from SS & 1K from federal retirement so her income is $ 1,800 a month and her state has their personal needs allowance at $ 60 a month, so every month the NH has to be paid $ 1,740 a month from mom for her SOC.
If mom got an additional $ 200 a mo. income, it would have to be paid to the NH. So doing the auto-sale contract could work but I would be careful that it didn't take her over the income maximum and then what if niece didn't pay…….Now for us, mom had an old car which she gave to worthless nephew right about the 5 year mark when she was in IL. She got a transfer penalty inquiry on it too at about month 5 of her Medicaid application. I was able to get the value of the car reduced to under 2K (the asset maximum allowed) by getting a letter from her mechanic stating it didn't drive and then all the cancelled checks for repair work done the year before the transfer to back-up their statement. It got reduced to junk value and was way under 2K, so all OK, no transfer penalty. Your mom's car at $ 2,200 is just right over the amount of assets if she sold it for full FMV. You say there is $ 600 in immediate expenses, so get a mechanic to write all this up so you can document reducing the FMV by the windshield, etc. See if you can get it legitimately to maybe half that value and sell it. Keep track of all documents on this too. You just need to make sure that her asset base is under the max. i would spend the money on a single big ticket item, like a prepaid NCV funeral or burial policy which is totally kosher for Medicaid.

so does mom still have her house? It sounds like she does, how are all the costs on the house (taxes, utilities, insurance, etc) being paid for? Her personal needs allowance of $ 66 a month won't cover the house costs. Can other family pay all this from now till whenever for the rest of mom's life? If the house empty or being occupied? Do you have a feasible plan on dealing with MERP - Medicaid Estate Recover Program - if need be? For most families, keeping the in a NH & on Medicaid parents home is just not financially feasible, so the house gets sold. I'd take a hard look at the costs on the home to see if this can work for the long term.
Also if other family members say they will do stuff, I'd totally forget about that happening. Yeah they'll cut the grass for a few months but not realistically for the years & years that mom could live in the NH. So think about that too. I think keeping an empty parents house can work, IF you have the ability to basically afford to have a 2nd or 3rd home but without having the immediate benefit of a 2nd or 3rd; and have a reasonable plan for MERP (like the home has a Lady Bird, or will qualify for other exemptions or exclusions); a pretty good sense of humor like for when you get a call from mom's neighbor that the big pecan tree just crashed into their yard and it's gonna cost $ 450 to get done & asap; and you either live close to check on the house regularly or have most excellent neighbors who will keep an eye on the house for family. It's a lot to consider to determine if keeping the home is really, really feasible in the long view. Good luck.
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We are in NC. I was told it was $66.00 by an attorney and the social worker. Medicaid sent paperwork of what they had paid to the AL facility and I think that's what she is allowed.

I could use her car for things relating to her and her needs, but I already have a new car. I hesitate to get rid of it to drive her car that is a 1998. Plus, it needs a new windshield that would be money she does't have and the air conditioner needs repairing. So, I would have to put around $600.00 into it now, plus maintain the liability insurance, taxes, tags, etc.

I know a couple family members who would like to buy it, but I don't want to put her income over or transfer something that will be questioned. I guess I'm going to have to speak with the Elder Law attorney again.
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Can you use it? Drive her in it? We were able to donate Dads truck to a "daughter/son/niece/nephew for no trouble. We had a nephew who really needed it
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Sunnygirl, thanks for the clarification on not being able to tranfer a vehicle for less than the fair market value. I wasn't aware of that.

It's an interesting point though.
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$66 a month insurance???? What state do you live in??
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I've thought of that, but there is something in he Medicaid paperwork about not transferring title to her property for less than fair market value, so that would preclude donating.

Selling the car for monthly payments is an idea, but I'd have to make sure it wouldn't mess up her Medicaid contribution to her AL facility. If she gets an extra $200.00 per month, then I think she still has to pay that to the AL facility and still only gets to keep $66.00. Oh my. It's so complicated.

It's such a shame. Her house needs several repairs very badly, but yet the car she doesn't need has to sit in the yard and be nonoperational. I get that it sitting still might cause the tires to deflate, but I can't see her doing without glasses, pads, toiletries, etc., so she can pay liability insurance on a car she can't drive. I'll talk to her case worker. Certainly they encounter this from time to time.
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Bear in mind that cars being stored deteriorate. Tires deflate and can sometimes flatten out. The car would lose value.

I know little about Medicaid, but I'm wondering if donating the car to a charity might be an option instead of storing it.
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