Florida Medicaid Planning: How to Protect Your Home, Assets, and Your Spouse
We are all living longer ⏳ and we are now increasingly faced with the fact or possibility that we, or a loved one, may need long-term care. That can look different for each person. Maybe you need an aide at home 🏠, an assisted living facility 🏢, memory care 🧠, or skilled nursing care 🏥.
The problem is that this care is extremely expensive 💸. People, rightfully, get extremely worried because they do not know how they will pay for this care.
Will they take your house? 🏡
Will you have to blow through your life savings? 💰
What if you need care but your spouse is still at home?
How will your spouse afford to live in the home while paying for your care at the same time?
Medicaid Planning is SUPER complex ⚖️, but this guide explains the main points and attempts to answer the questions, and worries, most people and most clients have when they come into my office.
1. Will Medicaid take my house?
Can I keep my homestead?
YES - with proper planning ✅
Does it matter if I live in my home vs. renting it out?
YES, it does matter.
What happens to the house after I die?
Medicaid will not take it WITH PROPER PLANNING.
Will my children lose the home?
NO! With proper planning, your home can pass to your children even if you receive Medicaid benefits.
This is usually people’s largest asset. Your home, with certain equity limits, is exempt from Medicaid, so it does not count toward the $2,000 limit for Medicaid eligibility.
If you are married and the healthy spouse continues to live in the house, then the house is exempt, regardless of equity limits. There are also adult child caregiver and sibling exemptions that may apply to the home.
However, it is CRITICAL ⚠️ that you properly plan so you keep your homestead and avoid a lien placed on the home.
MAIN POINT —> protecting your home is totally possible, but you have to properly plan! ⭐
2. How much money am I allowed to have to be able to receive Medicaid benefits?
In order to qualify for ICP or HCBS Medicaid (Nursing home Medicaid, assisted living facility, or home benefits), you cannot have more than:
$2,000.00 in countable assets ($3,000 if you are married)
$2,982.00 in income (Gross income)
Not all assets are treated the same. Some assets are exempt, so they do not count towards that $2,000.00 limit.
Examples of exempt assets are: ✅
Primary home (equity limits may apply)
1 car (of any value) 🚗
Irrevocable pre-paid burial arrangement ⚰️
$2,500 burial account (designated for funeral, cremation, etc.)
Income-producing property
Term life insurance policy (with no cash value)
Qualified retirement accounts (sort of, but these are treated nicely in FL)
Examples of assets that DO count towards the $2,000 asset limit: ❌
Bank accounts
Assets in a revocable trust
Annuities
Investments
CDs
Second homes and other properties
Note: these lists are not exhaustive.
MAIN POINT — > Most assets do count against that limit, but just because you are over in assets does NOT mean that you have to spend it all down! This is the point of Medicaid Planning: we want to protect and preserve these assets and get benefits.
3. What is Medicaid anyway, and what does it do for me? How is it different than Medicare? 🏥
Medicare is health insurance for people over 65 years old. It does NOT cover long-term care or custodial care. Medicare does NOT pay for nursing home care; it only covers short-term rehabilitation.
Medicaid, on the other hand, has programs that can help you cover most of the cost of a nursing home and a good part of the cost of an assisted living facility. There is also a program that can help with some home care.
This misunderstanding of the two programs causes families to lose time and money because they think Medicare covers a nursing home for long-term care and it does NOT.
MAIN POINT —> Medicare does NOT pay for nursing homes, assisted living facilities, or home care for long-term care. Medicaid does.
4. How much does long-term care actually cost?
A ridiculous amount! Like everything else, South Florida prices are some of the highest in the nation.
A nursing home in South Florida can cost $10,000 - $15,000 PER MONTH!
So, you are looking at $100,000-$120,000 per year.
Assisted living facilities can cost $3,000 - $8,000 PER MONTH and $50,000 - $72,000 or more PER YEAR!
Most people do not know that these benefits exist and can help with these astronomical costs! In fact, I have met with countless families who have already spent hundreds of thousands of dollars because they had no idea these benefits existed.
MAIN POINT—> Long-term care can cost THOUSANDS each month. There is help, so you do not have to spend down all your savings.
5. Is it too late to do Medicaid planning?
What if we need care now and haven't done any Medicaid Planning?
Is it too late if my loved one already has dementia, is hospitalised, and is being discharged from rehab soon?
No! While planning before a crisis is always better because we have more tools and more time to plan, we can absolutely still protect your assets to secure Medicaid for you, your spouse, or your loved one.
In fact, many of our clients come to us when their loved one is in the hospital, about to get discharged, or when they are already in a nursing home.
MAIN POINT —> Even though proactive planning is better, we can TOTALLY help you get benefits even during a crisis.
6. What if I just give my money to my kids so the money can be out of my name? 🚫
No! Do not do this. This is called gifting, and it is a huge no-no in medicaid world. You cannot transfer assets for less than fair market value. You cannot just give your assets away to qualify for Medicaid. If you do transfer money, then Medicaid will impose a penalty period for the value of all the gifts you made in that 5-year period, which means you won’t be able to get Medicaid benefits.
Gifting also takes many forms, and many people do it inadvertently. For example, they may add a child to an account or to their deed.
Please do not do this without first talking to an experienced elder law attorney. It is one of the most expensive mistakes you can make.
If you are already gifted and you need Medicaid, we may still be able to fix it and get Medicaid the right way.
MAIN POINT —> DO NOT TRANSFER MONEY! Please do not get cute or try to find ways to gift or transfer money just to get Medicaid. There is a right way to protect and preserve your assets AND benefit from them, and we can help you.
7. What if I need Medicaid and my spouse does not, or vice versa?
How can we afford a nursing home and also keep our home and afford life’s expenses?
Florida has protections for the healthy spouse. So, don’t worry - Medicaid will not force you to sell your house, and the government won’t take your house.
Home - If you are married, your spouse can keep the home, and it does not count towards the $2,000 limit you are allowed to have.
Community Spouse Resource Allowance (CSRA) - This is a factor when you are married, and one spouse needs Medicaid and the other does not (well spouse). Remember that you can only have up to $2,000 in assets to qualify for Medicaid? If you are married, the well spouse can have UP TO this amount ON TOP of the $2,000 the Medicaid spouse is allowed to have. Note that this figure changes yearly.
Minimum Monthly Maintenance Needs Allowance (MMMNA) - This is a factor when you are married, and it comes into play when dealing with income. It is common for both spouses to use both incomes to make ends meet. It is also common for one spouse to have a higher income than the other.
Remember that when a person is on Medicaid, most of their income, minus a modest personal needs allowance, goes to the facility. But for this rule, if the spouse with the high income goes to the facility and the well spouse does not have sufficient income or assets to maintain themselves, this could cause serious hardship on the well spouse.
This rule allows the Medicaid spouse to divert some or all of his or her income to the well spouse. The goal here is that the well spouse is not impoverished because the spouse with the higher income, on which they relied to meet expenses, is now in a nursing home.
In some cases, we may even be able to get more of the Medicaid spouse’s income, above the MMMNA, to cover shelter expenses of the well spouse.
Note: this rule only applies when the Medicaid spouse is looking for “nursing home Medicaid.”
MAIN POINT —> We can protect assets and income so that one spouse is not impoverished solely because the other spouse has to go into a nursing home or needs long-term care.
8. Does Medicaid take everything after death? ⚰️
Under Florida Law, Medicaid can file a claim against the estate of the deceased Medicaid recipient to seek reimbursement. Essentially, they create a lien on the estate up to the amount of long-term care services they provided. This is called Medicaid Recovery.
In Florida, this lien can only be placed on the probate estate of the Medicaid recipient. This means it is super important to plan properly so that a person on Medicaid avoids probate.
We have several ways to avoid probate, including Lady Bird deeds and trusts. Lady Bird deeds can help avoid probate and qualify for Medicaid, but please remember there are pros and cons to using these deeds. Everyone is different, and it is important to consider your entire situation, desires, and goals when choosing the right strategy.
There are some situations in which Medicaid Recovery does not apply, including, but not limited to: your homestead, if you are under 55, and undue hardship.
MAIN POINT —> In Florida, Medicaid can come back and put a lien on your estate up to the amount they spent on your care. The good news is that we can AVOID this lien completely with proper planning.
As you can see, Medicaid and Medicaid planning are really complex. There are a ton of rules, and they have to be followed. The important thing to remember is to do things right.
Get the help of a great elder law attorney.
We know how to protect and preserve your assets, protect your wishes, and get you the care you need.
For more information or a consultation, call us. This is what we do. 📞
