Does my 85-year-old mother with dementia have to sell her home and spend all her savings on nursing home care in Florida before she can qualify for Medicaid? The simple answer is no.
Florida is one of the most extensive homestead protected states in the nation. In Florida, the homestead exemption is protected under the state constitution, which provides robust protections for primary residences, including exemption from forced sale by creditors, regardless of its value. Specifically, Article X, Section 4 of the Florida Constitution protects homestead property from forced sale by creditors, which indirectly influences Medicaid eligibility and estate recovery.
Effective January 1, 2024, important rules have changed in the Medicaid rules in Florida.
- Income Limits for Medicaid Applicants
- The applicant’s monthly income must not exceed $2,829 (previously $2,742).
- The applicant can keep $160 per month for personal expenses.
- If an applicant earns more than this limit, a qualified income-only trust can be established. This irrevocable trust holds the excess income and uses it for nursing home and medical expenses. The applicant cannot serve as the trustee, and after the applicant’s death, Florida can claim the remaining trust funds to repay Medicaid. It is crucial to have an experienced elder law attorney set up this trust.
- Asset Limits for the Well Spouse
- The healthy spouse of a Medicaid applicant can keep up to $154,140 in assets (previously $148,620), in addition to exempt, non-available, and income-producing assets.
- Home Equity Limit
- The home equity limit increased to $713,000 (previously $688,000). Home equity is the market value of the home minus any debts. For homes with shared ownership, Medicaid only considers the applicant’s share.
- Income Limits for Medicaid Applicants
- The equity cap can be waived if:
- The applicant’s spouse lives in the home.
- The applicant’s child under 21 lives in the home.
- The applicant’s child, who is blind or disabled, lives in the home regardless of age.
- Applicants must show they intend to return home, even if unlikely. For example, renting the home on a long-term lease suggests no intent to return, which could affect eligibility.
Protecting Your Home from Medicaid Recovery
Many worry that Medicaid will take their home after they pass away. However, Medicaid cannot claim the home if the property is still the homestead when the applicant dies, and it passes to the applicant’s heirs, such as a spouse, children, grandchildren, siblings, nieces, or nephews. A common mistake is deeding the home to children before applying for Medicaid to protect it from a Medicaid lien. This counts as a gift during the five-year look-back period and can harm the applicant’s eligibility.
Florida’s Medicaid eligibility rules change often, and unfortunately the public, medical facilities and attorneys have difficulty keeping up with the ever-evolving changes. To ensure you get the most accurate advice consult with a Medicaid attorney as it will help you keep more of your savings before spending most of it on nursing home costs.