Can we add a name to the title of MIL's car to avoid diverting asset?

No, at this point you cannot change the title of her car. There is a 5 yr look back in most states. Yes its an exempt asset. If ur DH wants the car he is going to need to pay fair market value for it. Mom cannot gift it as this point. You can call a Medicaid caseworker and ask this question to see if I am correct and how it works in ur State.

You really should get with an elder care attorney ASAP before doing anything. But yes, adding another's name to a car title or any asset would likely be deemed to be gifting. She could sell the car or other assets, but those funds and any others in excess of the state limit would need to be spent down. Also there are other rules if a spouse still is in the picture.

Each state is slightly different regarding the amounts (total assets) allowed before one qualifies for Medicaid coverage of "long term nursing home care." Where I live, one cannot have more than $2.5K TOTAL (that is everything) and one cannot ever go above the limit, meaning the pot in the bank account has to be managed carefully to NOT exceed the limit by accident.

BUT that said, there are also "level of care" requirements that ALSO must be met. If she gets better and is able to drive again, she may NOT meet your state's "level of care" thresholds. Where I live, the "level of care" to qualify for Medicaid long term care coverage is the inability to perform independently AND safely more than one (several frankly) Activities of Daily Living such as bathing, grooming, getting to the bathroom, walking/transferring from bed to standing, etc. And also, one has to NOT be able to handle IADLs (Instrumental Activities of Daily Living such as: shopping, meal preparation, driving, health management -- managing one's Rx meds -- financial decision making-management). Most of the folks who do qualify have a combo of conditions (in ability to walk/transfer without assistance, inability to bath, inability to shop, drive, prepare meals, handle house keeping, cannot handle Rx or medical/care and decisions, cannot handle financial decision-making. Many have dementia. All to say if she is well enough to drive again, she may not qualify because driving implies a range of cognitive and physical abilities that may be above your state's "level of care" thresholds to qualify.

Start with a certified Elder Care Lawyer in your area, or where your mom lives. Such an attorney can help you and your mom navigate this complex area. Likewise, the nursing home will have a contract to be signed and review of that is key too in order to NOT agree to certain things and expenses that cannot be handled. The elder care lawyer can help review that paperwork which is like 100 pages long.....

Good luck, this is not an easy path to be on. The business manager at the nursing home your are considering can also be helpful answer questions. Also, for the "level of care" part, it is NOT you or your mom attesting a physician will have to file that paper work under penalty of perjury so it cannot be faked.

Although Medicaid is a federal program it is administered by each state, therefore the rules vary, even within states so the OP needs to look on the website for her mom's home county in MI as to whether what they intend to do with the car is advisable or not.

Blessed5X
Yes, one car is exempt. That only means Medicaid won’t require it to be sold now but it will still be on Medicaid radar for when MIL passes and they check on recovery (MERP).
If you buy it, FMV and put the money in her bank account and use it to buy things for her. Remember her bank account has to be under a state specified amount on the day she files.
I don’t know about putting DH name on title. Medicaid will say it still belongs to MIL but perhaps someone will have had that experience.
Is someone MIL POA? Do you know how MI DMV handles adding a name to a title? You might want to check.
There are so many things that can and do go wrong when applying for Medicaid. I wouldn’t risk it personally.

If you just add his name to title it will be seen as gifting and can jeopardize status and will affect her application

I don't know much about Medicaid, but I know they are pretty tight about the rules on moving assets and money around to 'hide' them from the Medicaid review.

I think even if your DH is on the title, they'll consider the car an asset of hers.