How can I protect my home from Medicaid estate recovery?
For most Medicaid recipients, their house is the only asset available, but there are steps you can take to protect your home. For many people, setting up a "life estate" is the simplest and most appropriate alternative for protecting the home from estate recovery. A life estate is a form of joint ownership of property between two or more people.
How does Medicaid estate recovery work in Florida?
Florida Medicaid is a creditor. Their process of attempting to collect is known as Medicaid estate recovery, and those who are planning for their future into advanced age should do so with an understanding of how Medicaid estate recovery works and what can be done to offer protection.
Is your home protected from estate recovery?
For most Medicaid recipients, their house is the only asset available, but there are steps you can take to protect your home. For many people, setting up a "life estate" is the simplest and most appropriate alternative for protecting the home from estate recovery.
Can creditors take my homestead property if I die in Florida?
It is true that Florida has a claim in the decedent's estate as part of estate recovery laws, but in Florida, your homestead property is exempt from your creditors, even upon death. There are a few caveats here: Your home must not have been rented during your lifetime, which would cause it to lose its homestead status.
How do I protect my assets from Medicaid recovery in Florida?
In order to protect assets from Medicaid estate recovery, one option for those who have the time to plan is to utilize a "Family Asset Protection Trust" or even, quite simply, a "Medicaid Five Year Trust." In these instances, it is best to have transferred all property and assets that need protection into this trust at ...
Can Medicare Take your house in Florida?
The basic answer is "no." If you die and your home goes to your heirs-at-law (i.e., family members) then the state of Florida cannot take your homestead property.
How do I protect my home from Medicaid in Florida?
The home will be protected by the homestead law, which provides the personal residence passes free from creditors, including Medicaid, when passing to certain relatives. A probate judge must enter an order that the home is homestead and passed to the relatives free of creditors.
What assets are protected from Medicaid in Florida?
There are also many assets that Medicaid considers to be exempt (non-countable). Exemptions include personal belongings, household furnishings, an automobile, irrevocable burial trusts, IRAs in payout status, and generally one's primary home.
How do I protect my assets from nursing home in Florida?
The key to asset protection when an elder is already in the nursing home is: 1) a good elder law attorney; and 2) a good durable power of attorney/estate plan that will allow the attorney-in-fact the power to protect assets. If the elder is competent, of course, the elder would participate in all decision making.
Is Florida homestead protected from Medicaid?
Even if the applicant never returns to the home, the homestead is protected and will never be made a countable asset for Medicaid purposes (unless rented!). Upon the applicant's death, the homestead is protected from creditors, including the state of Florida, if it descends to your heirs at law (i.e., your family).
Can a nursing home take your home in Florida?
One of the biggest concerns is often, “Will the nursing home take my house?” The short answer is no. A nursing home does not take houses. However, there are circumstances where selling the house may be the only way to get the funds to pay for the care that is needed.
Does Florida have expanded estate recovery?
Estate is either defined as those assets/property that pass through probate or some expanded estate recovery definition. Luckily, in Florida, Medicaid is limited to recovering from probatable assets only. Your Florida Medicaid lawyer can significantly reduce the assets Medicaid will be able to take from the estate.
Does Florida have Medicaid estate recovery?
Estate recovery applies to those Medicaid recipients who have received services at any time on or after August 31, 1993 and who were 55 years of age or older at the time of provision of the service.
What assets are exempt from Medicare?
Other exempt assets include pre-paid burial and funeral expenses, an automobile, term life insurance, life insurance policies with a combined cash value limited to $1,500, household furnishings / appliances, and personal items, such as clothing and engagement / wedding rings.
Is there a 5 year lookback for Medicaid in Florida?
In order to qualify for long-term Medicaid in Florida, such as nursing home or assisted living care, the applicant must not have given away (i.e., made "uncompensated transfers") assets within five years of applying for Medicaid benefits. This is generally known as the Medicaid “look-back” period.
Can they take your house in Florida?
The Florida homestead protects your house from forced levy and sale by a civil judgment creditor. In other words, if you owe money on a judgment, the creditor cannot take away your home. There are exceptions to what a homestead protects you from in Florida.
How to protect your estate from Medicaid?
One way to protect your estate from Medicaid estate recovery after you die is called an irrevocable trust. An irrevocable trust cannot be changed once it's been created. In most cases this trust is drafted by you, the "grantor" so that the income is payable to you for life; however, you cannot use the principle to your benefit or the benefit ...
How long does it take to get Medicaid if you move into a nursing home?
Under the DRA, the 40 month period won't begin until you've moved to a nursing home, you have reached the asset limit for Medicaid eligibility, until you have applied for Medicaid coverage, and you have been approved for coverage except for the transfer. So, if you have moved into a nursing home but it takes you another year to get your assets down ...
How long is the look back period for Medicaid?
Medicaid has what is called the "lookback" period. At this point in time, the lookback period is 5 years prior to the month that you are applying for coverage for nursing home care. This means that a penalty period may be imposed for the transfer of non-exempt assets for less than the fair market value.
How long does it take to qualify for Medicaid?
With proper planning, when the time comes and you are in need of long-term care, you will be able to quickly qualify for Medicaid benefits instead of having to wait 5 years. Since every person's situation is different, "Medicaid planning" will vary from person to person.
What is the main long term care plan?
In the United States, Medicaid is the main long-term care plan that is utilized by aging Americans. In the absence of having access to a long-term care insurance policy, the majority of people will pay out of pocket for their long-term care until they are finally eligible for Medicaid.
What does it mean to go into a nursing home?
Not only does going into a nursing home mean losing one's independence , but it also means that the cost of living in a nursing home can be a huge financial drain on your estate and your family.
How long does a deed trigger Medicaid?
Like a transfer to a trust, the deed can also trigger the Medicaid ineligibility period for up to five years.
What happens to a Medicaid recipient's house after he dies?
After a Medicaid recipient dies, the state must attempt to recoup from his or her estate whatever benefits it paid for the recipient’s care. This is called “estate recovery.” For most Medicaid recipients, their house is the only asset available, but there are steps you can take to protect your home.
What happens to the life estate when the owner dies?
The other owner has a current ownership interest but cannot take possession until the end of the life estate , which occurs at the death of the life estate holder.
What is life estate?
A life estate is a form of joint ownership of property between two or more people. They each have an ownership interest in the property, but for different periods of time.
How long does it take to get Medicaid if you transfer a deed to your children?
As with a transfer to a trust, if you transfer the deed to your home to your children and retain a life estate, this can trigger a Medicaid ineligibility period of up to five years. Purchasing a life estate in another home can also cause a transfer penalty, but the transfer penalty can be avoided if the individual purchasing ...
Can you recover Medicaid if you pass your house to a beneficiary?
In many states, once the house passes to the remainder beneficiaries, the state cannot recover against it for any Medicaid expenses that the ife estate holder may have incurred. Trusts. Another method of protecting the home from estate recovery is to transfer it to an irrevocable trust.
Does Jane's house go through probate?
When Jane dies, the house will not go through probate, since at her death the ownership will pass automatically to the holders of the remainder interest, Robert and Mary. Although the property will not be included in Jane’s probate estate, it will be included in her taxable estate.
What happens if you gift a property to a medicaid beneficiary?
In other words, if the consequences of a Medicaid penalty outweigh the advantages of gifting the property, the title is changed back into the name of the Medicaid beneficiary in order to allow that person to receive Medicaid benefits.
What happens if a nursing home spouse dies?
When the Nursing Home Spouse Outlives the Community Spouse. If the community spouse dies prior to the nursing home spouse, under state intestate laws, the nursing home spouse will inherit the home. If the home is solely in the name of the community spouse, then the home is not considered a personal residence by the nursing home spouse and ...
Can Medicaid lien against a house?
This is because Medicaid in these particular states cannot apply a lien against the house while the community spouse is alive and living in the home. This does not mean that if the state is entitled to recovery, it cannot pursue civil action. Whether this happens on a regular basis we don't know.
Can Medicaid be recovered if spouse dies?
Medicaid Recovery Where the Community Spouse Outlives the Nursing Home Spouse. In many states, if the community spouse is alive after the Medicaid beneficiary dies, the state will not attempt recovery even after the death of the community spouse. The home is always protected from recovery as long as the community spouse is alive whether he ...
Can you keep a house out of probate?
In those states that go after probate property only, anything that keeps the house out of probate will suffice. In other states, some common strategies include the use of irrevocable trusts or transfers before death. Most of these strategies involve giving away ownership of the home. This creates a penalty either for a potential Medicaid ...
Can a promissory note be used for Medicaid?
Promissory Note for Medicaid Recovery. The home could be sold on a promissory note and this effectively changes it from an asset to a loan and it is no longer considered an impediment to Medicaid qualification. Payments from the loan must be used to offset the care cost of the Medicaid beneficiary.
Is a home protected from recovery?
The home is always protected from recovery as long as the community spouse is alive whether he or she lives in the home or not. In those states that attempt recovery, the community spouse, if healthy, can employ a number of gifting strategies.
Can you take your homestead in Florida?
The basic answer is "no.". If you die and your home goes to your heirs-at-law (i. e., family members) then the state of Florida cannot take your homestead property. It is true that Florida has a claim in the decedent's estate as part of estate recovery laws, but in Florida, your homestead property is exempt from your creditors, even upon death.
Can you sell your homestead?
The homestead property can be sold and the proceeds can be protected, importantly. Another issue is that the home may be sitting there for a long time, which creates more issues. It may be best to protect your homestead property in advance with an irrevocable asset protection trust.