Florida Medicaid can provide funding to help cover the costs of long-term care, but the requirements make it seem like you have to use up all the money you have on care costs before Medicaid will be willing to pay any of your nursing home costs. Many people do just that.

But they don’t have to. There are strategies to preserve assets while still establishing eligibility for long-term care benefits through Florida Medicaid.

Overview of Medicaid Nursing Home Requirements

Sometimes referred to as the Statewide Medicaid Managed Care program, Florida Medicaid offers a number of different long-term care programs to assist with long-term care for seniors. The benefits and eligibility requirements vary according to the program and factors such as marital status.

However, one general rule to qualify for Medicaid assistance is the need to demonstrate a low level of income and a very limited number of assets. If you try to simply give everything to your kids, those assets will still be held against you until the 5-year look-back period passes. Even spouses of Medicaid applicants are limited in what they are allowed to retain since the marital property is jointly owned. So many people simply spend what they have on care to make themselves poor enough to qualify. But there are other options.

Spending Assets and Income on Something Else

Instead of spending all of their assets on nursing home expenses, some people choose to spend the money on other helpful expenses such as modifying the home to make it handicapped accessible or prepaying funeral costs. It is important to document expenditures to show that you are not violating rules about giving away assets or selling them for a fee under fair market value. An elder law attorney may be able to suggest expenditures that could help “spend down” assets to assist with qualifications.

Understanding What Counts as an “Asset” for Medicaid

It is possible to retain some property that is not counted as an asset for Medicaid purposes. The family home is one such asset. However, if an applicant has too much equity in the home ($636,000 in 2022), then they are considered ineligible for long-term care benefits unless they have a disabled child or spouse living in the home.

Another type of property that is not counted as an asset for Medicaid eligibility is retirement accounts such as an IRA that has systematic monthly withdrawals.

A Trust and Other Strategies Can Help Preserve Your Assets While Allowing You to Qualify for Medicaid

When you transfer property to an irrevocable trust, you lose control and ownership of that property. It belongs to the trust, and it is managed by the trustee. Thus, the assets are no longer considered “yours.”

However, you can receive benefits from the trust in the form of income.

A trust is one of many strategies a Medicaid planning attorney can suggest to help you qualify without spending all your money on nursing home fees. The key is to start planning early because in many situations you cannot become eligible for Medicaid benefits until five years have passed after you created and transferred the excess assets to the irrevocable trust.

Find Out How a Medicaid Planning Attorney Can Help

We all know that the costs of long-term care are frightening to contemplate. The more you plan ahead, however, the more options you have for preserving assets for yourself and your loved ones. Even if you do not have time to prepare in advance, a Medicaid planning attorney can still help make the most of available opportunities. Talk to the dedicated team at Sawyer & Sawyer, P.A. to learn how we could help.