In order to qualify for Medicaid benefits to help pay for nursing home costs, certain asset and income guidelines must first be met. A single or widowed individual must have less than $2,000.00 in “countable” assets to qualify for Medicaid. Countable assets consist of, but are not limited to: balance in checking, savings, certificates of deposit, savings bonds, cash value life insurance, stocks, investment accounts, and retirement accounts. One vehicle of any value is not considered as a “countable” asset of the Medicaid applicant, so its value doesn’t count toward the $2,000.00 asset limit. If more than one vehicle is owned, then the most expensive vehicle is exempt; keep in mind that all of the other vehicles will count toward the asset limit.
Since one vehicle of any value does not count toward the $2,000.00 asset limit in a single or widowed Medicaid case, it is often a good idea to consider an upgrade to the current vehicle. For instance, if the nursing home resident has countable assets of $35,000.00 that must be spent down to below $2,000.00 before the beginning of the next month to qualify for Medicaid, then a new vehicle may be purchased. The new vehicle must be titled in the name of the nursing home resident or it may be considered a gift for Medicaid purposes, which could result in a penalty period.
A vehicle purchase or upgrade can be a valid option even if the nursing home resident can’t drive. Often, family members can get insurance on the vehicle by signing a simple lease agreement with the nursing home resident to satisfy the insurance company’s requirements.
I advise that you meet with me, or another qualified attorney who specializes in these types of cases, before making any large purchases for Medicaid-eligibility purposes. It’s important to verify that the existing estate planning allows for family members to make such purchases on behalf of the nursing home resident. In cases where considerable assets involved, the law allows for some, or all, of the assets to be protected. Call my office at (812) 423‑1500 to schedule a consultation to discuss asset protection for you or your loved one.