Hello,
My Grandmother is currently living in an Assisted Living Facility in Illinois that accepts Medicaid. We have to pay them her Social Security minus $90 she gets to keep and then Medicaid picks up the rest. My Grandfather passed away in 2007 and her children have also passed away leaving just myself as surviving family. She quit-claimed her house to me in 2002 and she has no money in the bank, however she does still have an automobile in her name that is worth approx. $10,000 that she is not using.
I would like to sell it, but I am afraid the State will want the funds from the sale. Is there anything I can do to prevent this? Will it make a difference if I transfer the title to my name prior to selling it? Or should I just let it sit until after she passes? Just trying to figure out the best way to handle it.
Here is why, unless the car has fallen off the grid, the car is considered "real" property and as such the local tax assessor knows about it and therefore it is in the state's database. It is the state who administers Medicaid (not the Feds) so if you did anything with the car it might show up within the state databases. 10K in assets will kick her off of Medicaid until it is spend-down. Then she (well it would fall to you to do this) would have to requalify for Medicaid. Such a PIA to do, so really if the car is just there & not an issue, I would "leave sleeping dogs lay".
So what are you doing about insurance & maintenance on the car? Most states have exemptions (from their Medicaid tally) for normal costs paid by others for the asset-exempted property (home or car) that is kept & owned by the on Medicaid NH resident. Now if you are using the car or living in the home, then you can't do the exemption but if that isn't the case, you need to start a ledger of all the car costs you have paid for with documentation (like cancelled checks or receipts for bigger items or insurance premiums). When she dies, the MERP program (Medicaid Estate Recovery) will likely send you a letter stating what the state paid on her and that they want to know what you plan to do to pay on this amount IF there are assets in her estate. A 10K car isn't enough money to justify even opening probate imho but you want to have a $ figure on what you spent on the car to reduce the amount you spent from the Medicaid tally.Understand?
Also you want to get the Blue Book value - if it seems too high for how the car is, get an estimate of resale on it from some car dealers or whomever does the maintenance on it, so that is is less than the BBV. Understand?
Take the time to google MERP Illinois, to get a feel of how MERP is being done in your state. Most states have it done so that small asset estates are not even bothered with. MERP is a legal process that ultimately needs to be done in probate court and that takes time & money from MERP (or whomever your state has outsourced to do MERP). Most states have a threshold of what is cost efficient to actually do MERP. My gut feeling is that it is 50 - 65K for it to be worthwhile. But you never know so get those costs you paid for organized just in case.
Also look to see if your state allows for "muniment of title". If so, you can file that to have the car put in your name and avoid probate to do this. Muniment you really can do on your own with a couple of courthouse visits and filings if you are organized and have your wits about you. Most muniment action will require a MERP release so this can be done @ the courthouse, so you want to deal with whatever correspondence MERP send you after she dies so you can get the release from them to be able to transfer the title via a muniment. MERP tends to have strict timeframes for you to respond too.
You know it is great she QCD the property back in 2002 as you will have no MERP worries about that. Lucky you!!!