Can you keep a classic car if you go into a nursing home
Attorney Tom Olsen: Here's a text and she says, my husband has a 1970 Chevelle Super Sport. Would that disqualify him or us from going into a nursing home? 1970, we're talking 53 years old.
Attorney Robert Hidock: With Medicaid, if the car is 25 years of age it is technically a countable, but if it is a greater value than any other car they have, that Chevelle becomes the one car that they're allowed, then it's not a countable asset, it's protected.
Tom: Okay, because that car, and other people out there have cars, that car might be worth $100,000 and you're saying that as far as qualifying for Medicaid, that could be their one car that they're going to keep and Medicaid would allow them to do so.
Robert: Yes. Let's say they had a 2020 Toyota, then that becomes a countable asset doesn't necessarily disqualifying, but that becomes a countable one, and that Chevelle is the one that is protected.
Tom: In the last year or so, I had a gentleman come to see me and he had a car that was literally worth $500,000.
Robert: Wow.
Tom: I don't quite remember what it was, but what he had done was, he had titled it in his mom's name so that when she passed away and he inherited the car, he would get a stepped-up basis. Step-up basis says that when mom passes away and he inherits that car, his basis for capital gains tax purposes will be the value at the date of mom's death. If she passes away and he inherits that car and turns around and sells it for 500,000, he'll pay absolutely no capital gains taxes.
Robert: That's really pretty smart. Then if something happened to mom, the car wouldn't be countable anyway, so we wouldn't have to worry about it.
Tom: Exactly. Folks when we're talking about the step-up basis, it is one of the good provisions left over in the Internal Revenue Code and it's a good thing. You want to get a stepped-up basis on any asset that's got a low basis and a high value that most typically is somebody's home, but it could be a car. It could be the painting hanging on your living room wall. It could be the stock that you bought in Tesla. You want to get a step-up basis on it, and the key there is that your kids can't inherit that asset until you pass away.
[00:02:25] [END OF AUDIO]