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Mom has a car. She does not drive anymore, nor does she want to, but we use it to take her to Dr appointments, shopping, or wherever she needs to go. We need to use the car because she has some difficulty getting in and out of my pickup.
Mom wants to give me the car because she does not want to pay insurance on a car she no longer drives--and I could get cheaper insurance than her anyway. My problem is, if she should ever need Medicaid won't this look like a $5,000 gift? (She won't let me pay her fair market value for it.)


I'm thinking maybe write up a contract where she agrees to give possession of the car to me in exchange for the service of driving her. (Driving Mom around is the only thing the car is ever used for.)


Any other ideas?

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When my parents and their sweet ride moved in with us, they no longer drove at all. We also assumed they would last longer than 5 years.. So I "bought" the car, and transferred the title, etc to my policies. No one asked what kind of shape it was in,, nothing. If you are really worried,just "buy" it and put the payment into their account with a line on the check saying "car payment". They don't really need to know, and if they care you can use the money for things the car needs down the road, like tires and gas,maintence etc. We also "gifted" my dad's truck to a cousin who really needed the help. It's over 5 years now, and we have had no problems at all. But your contract idea is not bad at all!
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Yes, if she applies to Medicaid it will be a gift, and there is that "Look Back" period. Your tactic and most others have been tried on Medicaid, they are onto all of this. I would suggest you pay her the fair market value, using the sliding scale to your advantage and then keep good records to show that this money was used for your mother, no one else. Your contract will not hold any water unless she doesn't need Medicaid for 5 years beyond the transfer date of the car. I would add your name to the vehicle title, keep it and hope that she can make it the 5 years without needing Medicaid. As for her, try and explain this to her, it is to her advantage for you to pay her for this car or that she goes to the DMV and add your name to the title.
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You can be easily added to the title of the car here in California as a family member, spouse, child, etc. That means you are both owners, and it does up liability in that if you were ever sued, the car is also in your name. Here in California you don't even have to go to the DMV to do this, but if a member of Triple A you can go to their office and do it. You need the car title with you. This makes you and your Mom co-owners of the car. Now, if Mom dies and the state shows up wanting the car I guess they can get it from you, but Mom will be gone so your need of it will be gone as well if they do. I was just put on the title of my husband's car even tho I no longer drive, because everything otherwise passes in a trust and the car would have had to go to probate and title change and all of that in order to pass it to one of the grandkids. So I guess if the state were ever to show up within 5 years and ask for that car, they could have it. Hee hee.
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worriedinCali Jul 2019
The state of California will not show up wanting the car. They don’t take cars.
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What about having your Mom sell the car then giving the money to you to purchase another car putting that one in your name.  Just a thought.
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What about this, she puts you on the title of the car. This can be done, at least in California, for a wife, husband, child, brother, sister, in other words anyone close in nuclear family. It was a simple as taking the title with us and going to a triple A office if you are a member; you don't even have to go to the DMV in this state. Not sure where you are, but you can check if it is that easy. Then you can insure the car in stead of her. Make sure the title reads so it is either of you, not both required to do anything. That way, when Mom isn't here the car is already yours to keep or sell. I don't know that medicaid will have any reason whatsoever to look at the names on a car title you hold. But that would be a guess.
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worriedinCali Sep 2019
Just because something can be done with the DMV, it doesn’t mean it won’t affect Medicaid eligibility.
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Why not continue to drive it and transfer it after she’s gone? You are correct about Medicaid and gifting. She’s allowed to have a car while on Medicaid but with LTC Medicaid, it becomes a problem when said car is sold or given away. There is a poster in the same state as you who’s MIL was needing to get on Medicaid and the elder attorney advised them NOT to do anything with the car-don’t sell it, don’t transfer the title.
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Maybe you could look into reducing her insurance coverage to your state minimum to reduce the expense.

Does she have assets or income to protect from liability when someone else drives her car? Does your insurance protect your income and assets when driving her car?
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What about keeping the car in her name as legal owner and registering it in your name as registered owner. Maybe that will help with lowering the insurance while still keeping it available for her transportation.
does that work in CA? Check with insurance company/companies first.
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worriedinCali avatar
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worriedinCali Sep 2019
We don’t have that option in California. If the cars paid off, and if sounds like it, she can be added as registered owner only. There’s no legal owner registration here.
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Unless YOU are willing to foot a nursing home bill, it isn’t worth it to put it in your name. Trust me on this one!
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Again, you can be added to the title if your Mom is capable of doing this. If you are a member of Triple AAA you can do it in their office or can do it at the DMV. This makes the car yours if anything happens to it, and you are able to insure it and etc. This isn't illegal in any way. You simply own the car with your Mom. I was just added on the title of my partner's car because I don't drive, so wasn't on it, but do want it easily taken care of with his trust and will were anything to happen to him. This can only be done with immediate family members in the State of California. Access information by googling in your own state or call your DMV. As Cali said, if there is medicaid recovery states do not generally come after your car. Call your local DMV and they will give you the straight skivvy for your state and then you don't have to deal with us and our guesswork.
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