An attorney told me to buy a car and put in my father's name which would make him eligible for Medicaid. Does this make sense?

Was the attorney an Elder Law Attorney who specializes in Medicaid?

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.

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.

I'm not going to do it. I don't need the money or a car. But in response to Churchmouse and calling it Medicaid fraud, this would be no different from all the people out there that set up an irrevocable trust so they can get the money instead of giving it to the 'home', this would just be a smaller scale. No different. thank you.

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.

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.

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.

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.

I have no answer but I have a question, what if the car was titled to both of them? Is that possible, since the father might not get full use of the car? I'm just curious about something like that even if the OP isn't going to move forward. I'm not sure how the attorney would think his idea would work unless he mentioned joint ownership because I don't think you can gift the car.

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!

I have to add something about the idea that an irrevocable trust is a way to hide it from Medicaid. An irrevocable trust has to be set up before the 5-year lookback period. Otherwise it can be penalized the same as gifting. You can't hide money at the last minute by setting up an irrevocable trust.

Igloo, something I wondered is if the car would be included in Medicaid recovery. If they paid $30K for it and it was still worth, say, $20K at time of recovery, would the MERP team seek recovery? or would it be too much trouble?

As agreed with others here, this would definitely be elder financial abuse because you would be using his money to buy you a car just to make him eligible for Medicaid. Somethings just not right about this arrangement and I'm glad you decided not to do it because this raises a big red flag that someone somewhere well notice sometime

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.

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.

That is true, a car does not count, unless he is home bound.but cash does.
Even if Home Bound, he can claim that he needs the car so someone can take him to where he needs to go. If he is in a nursing home, that may be questionable.

I made my career taking care of the Elderly and Nursing homes. Took care of my father in law at home until last 48 hr, have done a reverse mortgage to help fund my mother in law age in place. I can give what I think is a fair and balanced answer. Our parents paid their way. Ultimately it is their money and should be used to provide the best care that the money can buy. If you can use the funds to care for the parent at home using their funds, then quit trying to interfere with a system that will. Be grateful Medicaid exists at all. Be grateful for finding a LTC facility that still accepts Medicaid as 100%. Use your energy to make sure your parents are using their money for the best LTC or could they go to an ALF (Assisted Living Facilty) for awhile before a LTC level of care? So many options. Great book called "Elder Rage or Take my Father, Please!" I had to turn to it several times just to not kill my patient/ward/inmate/father in law? Sandwich Generation, our kids and parents are the bread and we're the filling getting squished. It's their money/debt you don't need the added aggravation of trying to save it.

Don't do anything that is even close to fraudulent. The US govt is unforgiving when it comes to fraud or fraud like. Since you are asking it seems like you are questioning this transaction.

JessieBelle - about the car & estate recovery, I did not have a car to deal with for my mom's estate but did have her home. Based on my experience which for me meant doing probate, the executor has to do a form detailing of all the assets of the estate. The house, like a car, will be listed as an asset. Now it could be the tax assessor value or Blue Book value or the executor could go an get an appraisal done which produces a legal document done by the licensed and registered appraiser with their seal; all of which is entered into probate to come up with the $ amount value of the assets of the estate. This document gets signed off by the probate judge. Now for MERP each heir has to qualify for their individual exemption or exclusion. So if 3 heirs and estate worth 90K and 2 of those qualify for exemption (like caregiver & disabled heir & each share is 30K). So only 1 heir has to deal with a 30K possible claim on estate. State could be a stickler on all this but more than likely will do a release as going through the claim and filing process within probate court probably not meeting the cost-effectiveness for the claim to be done via probate.

States do have to follow set federal guidelines as to recovery cost benefit:
No recovery if claim under 3K
No recovery if recoverable estate under 10K
No recovery from heirs who qualify for exemption or exclusion
theres some other items as well
But states seem to be able to set their own internal guidelines in addition to the mandated federal ones. Like MS doesn't do recovery on estates who only have a house under 75K tax assessor value - thats probably the vast majority of property as MS is a very very poor state. Some seem not to have much interest in dealing with estates in probate. It seems - imo -that the thought could be that it is just easier to just place a lein on the property & if family / heirs do not do probate (either there was no will OR family is probate adverse OR doesn't have the $ to pay for probate) and wait till family go to sell or transfer and then family finds they can't as that lein (with interest) is lurking there & has to be paid for the property to sell.

I have no idea how all states or counties do this, but for the county I did probate in even for small estates affidavit (like could be the case if there was just a 20K car) you have to have a release from MERP or the state that is filed in court & approved before the judge will sign off on orders.

If we are talking about the price of a car, then making one "eligible", (assets of $2,000), I would make sure of two things;
1. That the use of the remainder will get parent into a NH that accepts Private pay AND Medicaid, in order to guarantee choice As you will learn not all facilities are "equal"..
2. see that Final expenses are taken care of using a Funeral Trust, (immediate Medicaid spend down.
After that worry about the car.!

Purchasing Noncountable Assets

Payments may also be made to buy a new, exempt asset. For example, a Medicaid applicant may purchase a new home if it meets the requirements for being an exempt home. Likewise, the applicant can purchase a new automobile if he or his spouse will drive it. For more information, see our article on eligibility for Medicaid long-term care.

What I posted are the guidelines for Medicaid on purchase of a vehicle.

A vehicle is considered an exempt resource but there are many others that might be more beneficial to you and your father. Prepaid burial and funeral, for example. Does he own a home? Make any necessary home repairs. Cleaning, painting, etc. As long as your father considers that his home, it is exempt and could make it easier to sell in the future. Be sure to keep receipts for all money spent as you will need to verify where the money went.

Although a car & a home can be "exempt" assets, there will be costs - insurance, taxes, maintenance, repairs, etc. If they are not owed, there will be a mortgage & car note.

Who is going to pay? And pay from day 1 of NH medicaid till they die and then through whatever legal after death process and any possible estate recovery?

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 .

Igloo: The car is going to paid for with $30K so I don't know why you are talking about a car loan, e.g. note.

This sounds like Medicaid fraud. I agree with the respondent above to ask Medicaid directly. I know that in Texas the burial expenses can be prepaid, so if you want to spend him down and haven't already done so that would be legitimate, but things very state to state. If you google Medicaid requirements in your state, it should be pretty clear. The application process is not quick either, in Texas I needed income tax documentation, social security documentation etc. You also have to be sure that the nursing home accepts Medicaid, not all do. My advice is do not skirt the law.

Since transportation is needed to care for your dad i don't see a conflict. There are numerous errands galore that a caregiver finds themselves doing -- whether their loved one is in a NH or at their own home. i live in MI and my aunt bought a new Lincoln Continental - being allowed to have a car, it's exempt from the assett tally. Another aunt had an 8-yr old car, and they didn't even care about value when she was approved for Medicare. Mom & i had a car titled in joint ownership. She wasn't on Medicaid but upon her passing, i just had to pay to get a new title.

When i did the paperwork for my aunt, she was allowed a home and a car. My aunt was widowed. [Medicaid doesn't take into account how the person would possibly be able to pay for home or car insurance or property taxes, based on their formulas for 'maximum assets allowed." ]

Your Dad can't buy a car solely in your name, but he can buy one for himself - even if you are the principal driver. The car is used for his needs - ask your DMV or Secy of State = re how the car should be titled regarding the fact that you need to drive him to doctor appointments and pick up medicine and groceries, picking up/returning his laundry, etc., errands for him. You'd need to be insured as a secondary driver [or primary if he is not able to drive himself - he'd probably need State ID]. He may not always need to be/want to be in a nursing home. If his health changes, you may be needing to change to home care - even if it's palliative care or Hospice. There's just something about HOME. [i pray it's because his health is better.] i am so grateful i brought my Mom home - she enjoyed home for too little time - merely 3 weeks - but once they are in a NH - even voluntarily for rehab - it is so very hard to get them out.

Sometimes, the answer you get re assets or spending down, depends on the way the question is worded. Another source might be a state social worker - librarian [they will guide you or even do the research] rather than asking Medicare directly.

You're not being devious - you're looking out for your father - as a caregiver you will be spending and literally running up the miles and the clock doesn't give you extra hours in the day. You NEED transportation on behalf of your Dad. You can't claim him as a dependent. Perhaps you have just one vehicle in your family: what happens if your personal car is in for service, or another family member uses it for work, errands, etc. You could just your Dad's car to run your Dad's errands or to visit him. [If in an NH - the ones who have family members that visit the most, get the better care]. You'd probably need to help pay for the insurance since your Dad wouldn't have visible assets to pay for the entire cost. My aunt [who lives in subsidized senior housing - HAD to get a new car to qualify for Medicare: her previous car was 15 yrs old, and was also a Lincoln Continental. She didn't have the funds to pay for taxis to do errands, etc. Ask your questions proactively. Is the car a necessity - for him or for a caregiver? i'm sure it is. Just check to be sure your Dad has his legal affairs up to date, especially disposition of his home and the car and everything else - he should be leaving the car to you in his Will or trust, etc. There is nothing wrong with your Dad getting a car so that you [do you have POA?] can properly care/tend to him and his needs. He would not qualify for leasing nor for payments [credit record] - negotiate on a cash basis. Keep in mind that it would need to accommodate perhaps room for a wheelchair [a van perhaps] and be easy for him to get in/out of [perhaps a cross-over / SUV]. If the car can't accommodate wheelchair - hired wheelchair med taxis are about $60 a trip one-way plus milage. This cost is also from the NH to the doctor's office, too, even if the doctor's office is located in a hospital.

Decisions aren't easy - but try to put the confusion and emotion aside, and consider the logistics.