Medicaid Rules For Giving Car Away

by Sue H
(Cincinnati, Ohio)

Question:

If you have been in nursing care for a few months, and have been told you cannot drive any longer, can you give your old car to one of your children who needs it, without being penalized by Medicaid if you need to apply in the near future, and it would be within that 5 year target date rule?

Answer:

Under the federal rules, a Medicaid applicant or recipient can safely give away any asset that is "excluded" (with the one exception being the home) without incurring a gift penalty. Note, however, that some states do not follow this rule and will penalize such transfers if made within the 5-year period preceding the date the gift-giver applies for Medicaid.

Also, note that if the car is owned by the Medicaid applicant or recipient but used by another family member who is a member of the applicant/recipient's household, it will still be an exempt asset. Also, if the car is used to drive the applicant/recipient (or other household member) around (for doctor's appointments, trips out, etc.), then the family member who uses the car need not even reside in the household.

You can get lots of other medicaid tips at www.medicaidsecrets.com.