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?
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.
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.
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.
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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