People often wonder what happens if they need long-term care or full skilled nursing home care as they get older. This usually comes with fears about financial concerns, including the cost of care services, whether they will burden their loved ones, and whether the nursing home or Government will take their house.
Can Medicaid take your home in Florida as part of their estate recovery program? The short answer is no. However, there are circumstances where selling your home or other property may be the only way to pay for the care you need.
One thing that happens first when an individual is admitted to a nursing home is the completion of long-term care paperwork. New residents must declare whether they intend to use Medicaid to pay for their monthly nursing home costs. Medicaid will allow a person to have up to $2,000 in countable assets for a single person, though there are some assets that are non-countable.
What is Considered a Countable Asset When Determining Long-Term Care Medicaid Eligibility?
In Florida, Medicaid considers the following assets exempt when determining a Medicaid applicant’s eligibility for assistance, meaning Medicaid will not count toward the Medicaid asset limit:
- Your Homestead
- Income Producing Property
- Life Estates
- Some types of Life Insurance
- Personal Property
- Irrevocable Trusts
- Prepaid Funeral Expenses
Your home is considered an exempt asset when the value is no greater than $636,000 (as of 2022). This is called the home equity rule. It keeps you eligible for Medicaid without having to sell the home.
Can Medicaid Take My Home If a Child or Spouse Lives in the Family Home?
If your spouse, a child under the age of 21, a disabled child, or a sibling with an equity interest in your home is living in the home, the state cannot file a lien on the home for reimbursement of Medicaid nursing home expenses or to pay for long-term care.
However, suppose your dependent relative or spouse moves out of the home, or your spouse dies. In that case, the state may be able to attempt to make a claim. Medicaid may demand the sale of the home. There are some situations where the home’s equity value is protected from Medicaid, such as if the family home is in your spouse’s name and you have no interest in the home. If the house is part of an irrevocable Medicaid Protection trust, it is also not considered countable.
What are the Best Ways to Protect Your Home from Long Term Care costs and Medicaid?
When planning for end-of-life stages, it is best to begin planning for nursing home care well before you need in-home care, nursing home or assisted living, or need Medicaid benefits.
Here are some ways to ensure your assets are protected and that you still qualify for Medicaid if you become a Medicaid beneficiary.
Use a Life Estate Deed to prevent Medicaid from taking your house
This is often the most simple and appropriate option for protecting the home from Medicaid while still getting the benefits you need. This is a type of dual ownership of an asset between two or more individuals. Each individual has an interest and ownership of the property, but for different periods of time. The person holding the estate has possession of the property for their lifespan. The other owner has an interest but cannot take possession until the end of the life estate, which occurs when the Medicaid recipient dies.
Use a Trust to protect your home from Medicaid
Trusts provide more flexibility than a life estate. Irrevocable trusts are often used for Medicaid Planning. An irrevocable trust allows you to leave property or assets in the care of a trustee for the sake of a beneficiary. Though you lose a degree of control over the assets, those assets become exempt from Medicaid as you no longer own them. However, asset transfers to an irrevocable trust are subject to the Medicaid 5 year look-back period.
Plan Now to Protect Your Assets and Home Equity from the Medicaid Estate Recovery Program
If you are healthy and not looking to receive any long-term care or Medicaid assistance in the immediate future, there are steps now you can take to better prepare yourself and your loved ones for the future:
- Ensure Your Estate Plan is in Order – Is your trust and/or will up to date? Do you have a living will, health care power of attorney, and a durable power of attorney? If not, enlist the help of a Medicaid planning attorney to get your documents in order and ensure they are up to date so the state cannot use your house to pay for your long-term care. This will also help protect your equity interest in the home and prevent your estate from having to go through probate.
- Consider Long-Term Care Insurance – Some private insurance carriers provide options for this coverage. Still, applicants are typically required to be healthy at the time of application to obtain coverage.
Medicaid is highly complicated. This makes it imperative to take steps now to protect your home ownership. If you believe a nursing home is in the future for you or a loved one, it’s time to consult with an experienced Elder Law Attorney.
At The Estate, Trust, and Elder Law Firm we help you start planning for your estate today so you don’t lose valuable assets, retirement funds, or your home down the road. Contact us to get started today.