Will I Lose My Homestead Property If I Need Florida Medicaid?
- Oct 4, 2017
- 2 min read
One of the biggest fears people have when considering long-term nursing home care is:
Will Florida Medicaid force me to sell my Florida Homestead Property?
Fortunately, the answer is often no.
With proper planning, many Florida residents are able to qualify for Medicaid benefits while preserving their home for their spouse or children.
Is My Florida Homestead Property an Exempt Asset?
In many situations, yes.
For Medicaid purposes, your primary residence (often referred to as your homestead) is generally considered an exempt asset if certain requirements are met.
Florida law provides significant protections for homestead property, and Medicaid rules often allow applicants to retain ownership of their home while receiving long-term care benefits.
What If I Move Into a Nursing Home?
Moving into a nursing home does not automatically mean you lose your homestead.
If the home is occupied by your spouse or certain qualifying family members, it will generally remain exempt.
Even if no one is living there, your residence may still qualify as an exempt asset if you intend to return home, subject to applicable Medicaid rules.
Every situation is different, so it is important to obtain legal advice before selling, transferring, or otherwise changing ownership of your home.
Should I Rent My House?
Be careful.
Renting your residence while receiving Medicaid benefits may affect whether the home continues to qualify as an exempt asset and may have income tax and Medicaid eligibility consequences.
Before renting your home, consult an experienced Florida elder law attorney.
Can I Protect My Home Before I Need Medicaid?
In many cases, yes.
One of the most effective planning tools is a Medicaid Asset Protection Trust (MAPT), an irrevocable trust designed to remove assets from your countable estate while allowing you to retain certain benefits.
If properly established and funded well before Medicaid is needed, this type of trust may:
protect your home from Medicaid spend-down requirements;
preserve a step-up in income tax basis for your beneficiaries;
help avoid unnecessary probate;
protect assets for future generations; and
provide greater flexibility than making an outright gift.
Beware of the Five-Year Look-Back Period
Timing is critical.
Most transfers to an irrevocable Medicaid planning trust are subject to Medicaid's five-year look-back period.
If you apply for nursing home Medicaid within five years after making certain transfers, you may become temporarily ineligible for benefits. Because these rules are complex, Medicaid planning should begin before a health crisis occurs whenever possible.
Proper Planning Can Save Your Home
Many families mistakenly believe they must spend everything they own before qualifying for Medicaid. That simply is not true.
With careful planning, many Florida families are able to preserve significant assets—including their home—while still qualifying for Medicaid benefits.
Every family's circumstances are different. The best strategy depends upon your health, your assets, your family, and when nursing home care may become necessary.
If you are concerned about protecting your home, qualifying for Medicaid, or preserving assets for your family, consult an experienced Florida estate planning and elder law attorney before making any transfers.
