We must cover several concepts to flesh out and fully answer this question:
As always, it is best to come into our offices (or set up a virtual consultation) to speak to a Medicaid planning attorney about the options specific to you.
Florida Medicaid Limits
The intricate asset restrictions can be a significant problem for someone receiving Medicaid benefits. To qualify for Medicaid in Florida, you cannot own more than $2,000 in countable assets or $2,829.00 in total gross monthly income (from all income sources), effective January 2024. Because this article is focused on selling a home (and obtaining or maintaining Medicaid long-term care benefits), we’ll focus on the fact that when you sell a home, you are taking a non-countable asset and turning it into a countable asset!
First, understand that, per Florida Medicaid rules, the applicant’s primary residence is considered a non-countable asset. If the applicant or spouse resides there—or if the applicant intends to return after treatment—Medicaid does not regard the home as a countable asset. That stipulation is qualified by the fact that the house equity cannot exceed $713,000 (as of 2024). So, as long as the primary home is not sold, the value of the house is not an issue. But let's say your elderly parent is in an assisted care facility or nursing home, and the house's maintenance expenses are getting to be too expensive (e.g., the insurance, taxes, repairs and utilities). The asset cap becomes a concern when the applicant decides to sell the house. The good news is, there's a solution.
The sales proceeds, due to the Medicaid applicant from the home sale, is cash. Cash/money in the bank absolutely counts against the Florida Medicaid $2,000 asset limit. So it is definitely an impediment to Medicaid eligibility. Luckily, our law firm specializes in dealing with these kinds of barriers to Florida long-term care benefits! We have tools and strategies that we can deploy to protect assets in a Medicaid-compliant manner.
The Lookback Period
You cannot simply donate all your wealth to your family to qualify for Medicaid: in other words, don’t just transfer the home-sale proceeds to a child, other family member or friend. Be wary of this Medicaid regulation that restricts the transfer of assets. Transferring the house to a loved one, before the sale, is another common error.
Unfortunately, a different Medicaid law, known as the five year lookback rule, or lookback period, declares this transfer illegitimate and would make the homeowner ineligible for Medicaid for some time.
A person applying for Medicaid benefits may not have transferred assets during the previous five years (lookback period). If you apply for Medicaid today but transferred your home to a relative as a gift within the last five years, Medicaid will determine the length of time you will be ineligible for Medicaid depending on the value of the asset you transferred. Therefore, your parent should maintain the house in their name unless you plan very far in advance.
What Can I do with Home Sale Proceeds and Still Be Eligible for Medicaid
First, rest assured that with the appropriate medicaid plan in place (hopefully prior to the home sale) the proceeds from the home can be legally and ethically protected in compliance with Florida Medicaid rules and regulations.
An exact prescription is impossible to provide without a consultation - only because each medicaid-planning strategy has pros and cons - we do not have a one-size-fits-all solution.
Certain strategies have tax consequences. Others have limited medicaid payback obligations. Some strategies involve stowing money away in which it is not accessible until after the medicaid recipient passes away, while others provide for more liquidity.
The right approach to Medicaid planning is different for every family that we work with. We take pride in crafting unique combinations of strategies to suit your particular needs.
Please schedule a consultation to discuss your case. We look forward to serving you!
To qualify for Medicaid in Florida, the state may ask for a current tax bill, a real estate appraisal, and copies of your mortgage. While your home is a non-countable asset, how much equity you have in your home can affect whether Medicaid pays for your long-term care services.
To qualify for Medicaid in Florida, the state may ask for a current tax bill, a real estate appraisal, and copies of your mortgage. While your home is a non-countable asset, how much equity you have in your home can affect whether Medicaid pays for your long-term care services.
Establishing an irrevocable trust can protect your assets from being counted as part of your financial resources when applying for Medicaid. Once assets are transferred into the trust, Medicaid cannot access them, and their value will not affect your eligibility.
For an individual who is not married, the Applicant can only have $2000 in countable assets. This number is unchanged from 2011. For an Applicant who is married, their Spouse can have additional Asset of $148,620.
Medicaid will not seek to recover the debt if the Agency receives sufficient verification that the deceased recipient was survived by a spouse, a minor child (under age 21), or a child who has been determined by the Social Security Administration to be blind or permanently and totally disabled.
Yes, it is possible to meet the eligibility requirements for Medicaid while owning a house in Florida. If the Medicaid recipient's primary residence is protected by Florida homestead laws, it is not considered a “countable asset” towards Medicaid asset limit requirements.
Why Florida Utilizes a “Look Back” Period. Generally, in order to receive Medicaid Long-Term Care, the applicant must not have “given away” assets within five years of applying for Medicaid benefits. This five year window is known as the “look back” period.
Homestead property in Florida is protected from creditors by the Florida Constitution. It is also an exempt asset when applying for Medicaid to pay for nursing home care. There is no limit to the value of Homestead real property, if there is a spouse or disabled child living in the home.
My answer to him was that he was correct - Florida Medicaid does have a pay back provision, just like all states. During your lifetime, if you receive Medicaid benefits, if you die after age 55, the State of Florida is a creditor in your estate.
The short answer is "no" with a few caveats. First, your Florida homestead is not a countable asset for Medicaid purposes unless it is worth over $603,000 (2021). If you are married, there is no cap in the value to the homestead. This means that you are allowed to own a home if you are in the nursing home.
Whereas the homestead exemption from general judgment creditors is unlimited in amount, Medicaid protects Florida homestead value up to approximately $560,000. A Medicaid applicant with a more valuable home is ineligible for Medicaid even through the applicant may have low income and meet every other Medicaid criteria.
Limits on Medicaid Applicant's Gross Monthly Income
Effective Jan 1, 2024, the applicant's gross monthly income may not exceed $2,829 (was $2,742). The applicant may retain $160 per month for personal expenses.
What Are the Countable Assets in Florida? Cash value in life insurance policies (if the policy's face value exceeds $2,500). A second car, under 7 years old. Real estate (not including a homestead and one rental property, read below for value).
A lady bird deed allows a person to automatically transfer their property upon death inexpensively and without probate. In Florida, a lady bird deed also lets the current property owner use and control the property during the owner's lifetime. The property automatically transfers upon death to designated beneficiaries.
Section 1917 of the Federal Social Security Act (42 USC § 1396(p)), and 42 CFR 433.36, requires that States recover medical assistance payments made to, or on behalf of, a Medicaid recipient from the assets in the estate of that deceased recipient.
Simply put, if you live in Florida, Medicaid will “look back” at all asset transfers made for the 5 years preceding your application. The look-back begins as of the date of the Medicaid application.
Given the financial definitions of asset and liability, a home still falls into the asset category. Therefore, it's always important to think of your home and your mortgage as two separate entities (an asset and a liability, respectively).
An asset is anything you own that adds financial value, as opposed to a liability, which is money you owe. Examples of personal assets include: Your home. Other property, such as a rental house or commercial property.
Introduction: My name is Eusebia Nader, I am a encouraging, brainy, lively, nice, famous, healthy, clever person who loves writing and wants to share my knowledge and understanding with you.
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