Should I pay off my mother-in-law's car and then transfer the title to us or should she "sell" it to us? - AgingCare.com

Should I pay off my mother-in-law's car and then transfer the title to us or should she "sell" it to us?

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My mother-in-law bought a car through Ford Credit last year. Due to early dementia, she has experienced many falls and episodes. She is now living in assisted living and not expected to be independent. We are trying to get her on Medicaid because her pension and social security are $100 less than her monthly payment for assisted living. She has $80,000 in unsecured debt and zero assets. She basically owns a cell phone and that's it. My husband is an hourly employee (school paraprofessional) and I am a teacher. We are in our 50s and we do not have extra money laying around. We are not prepared for our own financial needs when/if we retire. We are trying to decide what to do with her car. She has not made payments since January and we were thinking we would just let it get repossessed. The payoff is low blue book so even if we sell it, there won't be much money left and it will just go to Medicaid if we can get her qualified. Then we started thinking that we should just buy it because we have been driving it and we know it is a good car. It is also a car that she can easily get into and out of when we take her places. I just paid the last few payments to get the loan current, but the insurance is coming due next week. Due to accidents and claims, her insurance is unreasonable. We need to get the car insured with our policy so we need it in our name. I assume that we can pay the car off and then transfer the title to us. If we do that, we won't have sales tax to pay but we might have some issues with Medicaid. Maybe a transfer penalty. If we take out a loan and "buy" it for the payoff there will be sales tax, but then we won't have issues with Medicaid. Is this correct? I also want to state that we are not really in need of a car, but it seems like a good deal. We have 2 cars- one with 150,000 miles and one with 250,000 so we know that the "need" can happen any day. This is also not a car that we would normally be in the market for.

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Since you're not trying to do anything shady, talk with the Medicaid rep. There's no perfect answer with this scenario.
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Reply to jjariz
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I should also clarify that my husband has financial power of attorney.
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Reply to wyopamela
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