Will Gifting a Car Cause a Medicaid Penalty Period?

Can my mother gift her car to my daughter without worrying about the five-year look-back period if she applies for Medicaid?

The answer is probably "yes," but it depends on the circumstances. Are we talking about a 10-year-old Corolla or a brand new Mercedes? There will be more scrutiny for the latter. Is your mother buying a new car, or stopping driving altogether? If she’s still healthy and alert enough to drive, you have a good argument that the gift has nothing to do with Medicaid planning. Does your mother have substantial assets other than the car, or is that her major asset? If the transfer doesn’t affect her eligibility because she still has a lot more to spend down, it's less likely to be a problem. Unfortunately, this is one of those gray areas where the answer depends on whether you can convince the Medicaid intake worker that the gift to your daughter was not for Medicaid planning purposes. It will depend on the circumstances, on how such a transaction is treated in your state, and perhaps on the particular intake worker.

For more information about Medicaid's asset transfer rules, go here: http://www.elderlawanswers.com/medicaids-asset-transfer-rules-12015.