Q: My father is getting older and we are going to sell his house to pay for assisted living care. Can items such as an old car. Car is only worth about $1000. My other brother is concerned that would be considered a gift and will cause IRS issues or if later if his money is gone before he dies that if he needs Medicaid assistance. That might cause problems later. We are also trying to get help from VA but they are slow. Brother is also worried about keeping some money from sale of father’s house for burying him if VA doesn’t come thru in time. Said could take years to find his records.
A: In the event your father would need to qualify for Medicaid funding within the next five years, any transfer of his assets without fair consideration (such as gifts to family) could disqualify him from Medicaid eligibility. I would consult with an elder law attorney who does VA benefit law as well. You should not start liquidating his assets without the guidance of a lawyer. If you transfer this car, please document its value with an appraisal, or repair estimates or photos. You may end up paying back the value of the car some day to Medicaid in order for him to qualify. If you sell the house, you must sell it for fair value and keep records to the penny as to how the proceeds were spent on your father’s care. It is his money. You could benefit from a lawyer as you may be able to shelter some of this money from Medicaid.