One of the most common issues with assets when completing a Medicaid plan and application for assisted living or nursing home benefits is how cars are counted. Are cars a countable asset? Or are they not countable like an applicant’s home? Like most issues with Medicaid planning, it depends.
A Medicaid applicant can have one car regardless of age or type.
According to Section 1640.0591, of the ESS Program Policy Manual, “one automobile, regardless of value of use, is excluded as an asset.” Therefore, just like an applicant’s home, one automobile is excluded from being counted as an asset for the applicant.
If an applicant has more than one vehicle, the excluded vehicle is the one that has the highest equity value. Therefore, it is the vehicle that has the highest value, less any loans that are still secured by the vehicle. This allows for the applicant to have the vehicle excluded that is more advantageous to the applicant.
Any vehicle over seven years old is excluded.
In addition to the one vehicle of any age that is excluded from being counted as an asset, any vehicle that is more than seven years old is excluded from being counted, with one major caveat. If a vehicle is over seven years old but qualifies under one of the following classifications, the vehicle is counted as an asset:
- Luxury cars, including but not limited to Jaguar, Mercedes Benz, Cadillac, Lincoln, Corvette.
- Automobiles or trucks that are over 25 years old.
- Customized or specialty vehicles, except for those “modified for use by a handicapped person.”
Even though the policy states that these automobiles are countable, if you use it as your daily driver or it’s an old car, but not particularly valuable it may be possible to argue that it should not be countable. If this argument is not clear and concise, you may end up having to go to a fair hearing in order to get the approval. This is not a strategy for the faint of heart.
How can a Medicaid planning attorney use the vehicle rules to allow an applicant to qualify for Medicaid benefits while retaining the car?
The first way that a Medicaid planning attorney can use the car exemption to allow for an applicant to qualify for Medicaid assisted living or nursing home benefits is to convert countable assets into a vehicle by purchasing one. If the applicant can turn a checking account of a sufficient amount into a non countable vehicle.
The second way that a Medicaid planning attorney can use the car exemption is to allow for the applicant to purchase a portion of a loved one’s vehicle. This strategy is used when an applicant may not have sufficient countable assets to make the purchase of a vehicle outright possible. This allows for an applicant to protect the assets while qualifying for Medicaid benefits. The vehicle is titled as joint tenants with rights of survivorship, which means when the applicant passes away, the other joint owner of the vehicle will own the entire vehicle outright again, without the need for probate.
If you have questions about Medicaid planning or nursing home benefits, contact us today to schedule a free consultation.
If you have a question about whether Medicaid planning or applying for Medicaid assisted living and long term care benefits makes sense in you or your loved one’s situation, contact us today to schedule a free consultation. During the consultation, one of our experienced Medicaid planning attorneys will go over you or your loved one’s situation, assets, and income in order to determine whether applying for Medicaid benefits makes sense. If it does, the attorney will review a potential plan over the phone so you will know what may be involved.