To qualify for long-term Florida Medicaid benefits to cover nursing homes, in-home care, or care in some assisted living facilities, your assets must be less than the resource cap established by Medicaid. The simple solution would be to give everything to your kids, so you’d have no assets and you’d qualify for benefits. Of course, it doesn’t work that way.
Rules penalize many property transfers made too close to the time someone wants to apply for Florida Medicaid. However, Medicaid planning attorneys know strategies to make the most of the opportunities allowed by the rules to help you conserve assets while establishing Medicaid eligibility. The key is to plan as much as possible.
To meet the asset limit for Florida Medicaid, you must have no more than $2,000 in “countable” assets. Your spouse is also limited in what they may own, even if they do not need care. Property owned by a married couple is considered to belong to both, so officials will look closely at assets owned by both the applicant and the spouse.
They look at assets currently owned and assets given away or sold for less than market value. For five years, any questionable transaction can trigger a penalty period that delays eligibility for Florida Medicaid. This covers assets given to family members and assets transferred to a trust. The length of the delay in qualifying for Medicaid benefits when a transfer has occurred within the 5-year look-back period depends on several factors, including the value of the property transferred. Generally speaking, the value is divided by a number determined to represent the average monthly cost of private nursing home care.
In many cases, an applicant’s family home is considered exempt property and not counted as an asset for Florida Medicaid eligibility purposes. However, if an applicant has home equity that exceeds a certain amount ($636,000 for 2022), then that applicant is not eligible for long-term care benefits even if they qualify for other types of Medicaid benefits.
If the applicant owns the home jointly with someone else, then Medicaid will look at the applicant’s share of equity to determine whether the applicant qualifies. Moreover, if the applicant’s spouse or child under age 21 or with a disability lives in the house, then the home equity limitation usually does not apply. A Medicaid planning lawyer may be able to show why an applicant should not be subject to the home equity limitation or convince authorities that the home equity limitation would cause extreme hardship and should be waived.
Strategies to Protect Assets
Attorneys who help clients prepare for long-term care needs use a variety of different options depending on the client’s needs and situation. If long-term care benefits are not needed right away, it might make sense to establish an irrevocable trust and transfer many assets into that trust. The trust then technically owns the assets and the trustee manages those assets, so they are not counted toward eligibility requirements. However, although the client can receive income from the trust they are prohibited from having access to the principal and cannot be the trustee of the trust.
Trusts are often used in combination with gifts, co-ownership, strategic purchasing, insurance, and other options to help an applicant qualify for Medicaid without spending everything on nursing home care.
Talk to a Medicaid Planning Attorney to Learn the Options Available in Your Situation
At Sawyer & Sawyer, P.A., we understand how confusing, frustrating, and scary it can be to contemplate the cost of long-term care. We want to help. Contact one of our experienced Medicaid planning attorneys today to find out what may be possible in your particular situation.