We all want to age gracefully, stay at home for as long as possible, and never need long-term care, such as a nursing home. Often though, the elder and their family is placed with long-term care decision after a quick down-turn in health, such as after a fall or stroke. When your loved one needs long-term care, families will often think about trying to access Medicaid for help, which may mean looking to protect assets from the high costs of long-term care.  We also see a number of myths and falsehoods about long-term care Medicaid in Florida we want to dispel or clarify so you can get good advice to help your loved one.

First, some ground rules about Medicaid and Long-Term Care:

  • Long-term care is expensive (easily $11,000/month for nursing home care, while dementia care in assisted living can be over $7,000/month)
  • Medicaid may help pay for long-term care in the home, assisted living or in the nursing home
  • Medicaid will only help pay for care when the applicant has assets under the income and asset limit
  • Good elder law attorneys may have legal ways to help protect assets in certain circumstances
  • When your loved one is in the nursing home (i.e., a skilled nursing facility), families often do not know where to get good advice. To make matters worse, many people (nursing home staff, friends, family, non-elder law attorneys) will offer bad, conflicting or incorrect advice, all in a difficult time.

This outline is being written to help dispell some of the myths you may be hearing when/if you are thinking about Medicaid and paying for long-term care for your Florida loved one.

Lie #1: You can give away $18,000 per year to protect your assets from the nursing home

The $18,000 per year gifting limit (2024) is based upon the federal estate and gift tax and has nothing to do with Medicaid in the Medicaid application process. The reality is that you're not able to give away any assets at all within five years of applying for Medicaid for your loved one. If you are giving assets away, then the assets must be returned in order to apply for Medicaid. We have a previous blog post on calculating the Florida Medicaid transfer penalty.

Lie #2: Having your name on the elder’s assets can protect them from the nursing home

Having your name as a co-owner of the elder's assets (i.e., bank accounts, stocks, etc.) when looking for Medicaid does not protect these assets. Medicaid considers any asset with the elder's name on it to be counted as the elder's asset. If a child's name is on these assets as a co-owner, Florida does not care and still counts that asset as 100% owned by the elder. The basis for the rule is that many elders add their children to their assets as a matter of convenience. Thus, even if you are a co-owner of your loved one’s bank accounts, 100% of the asset is countable for Medicaid purposes (unless you can show otherwise).  

Lie #3: The state of Florida can take your home upon your death if you get on Medicaid

While there could be concerns here, it is rarely an issue. The state of Florida is a creditor in the Medicaid applicant's estate and as a creditor, this may be an issue as part of the probate process. The further truth, however, is that a Medicaid applicant’s homestead property is not subject to the decedent’s creditors, which includes the state of Florida as a creditor. Thus, even if your loved one was in a nursing home for a long time, and the state of Florida has a claim in their estate, Florida will not be able to take the protected family homestead as part of the probate process.

Lie #4: Nursing homes that accept Medicaid give bad care

It is illegal for nursing homes to discriminate care based upon payer source. Thus, if your loved one is receiving rehabilitation due to Medicare, an HMO, or is receiving long-term care through private pay or Medicaid, the nursing home and does not discriminate for care purposes. Of course, care in nursing homes certainly varies based upon ownership/management of the facility, but care itself is not based upon Medicaid versus private pay. 

Lie #5: If your income exceeds the income cap, you cannot get Medicaid

Medicaid qualification involves an income and asset test. If the applicant's gross income exceeds the income cap (2,829 per month for 2024), then Medicaid will only be allowed for nursing home purposes if a qualified income trust is established. With a properly established and funded qualified income trust, the elder’s income can exceed the income cap. The qualified income trust is a special type of trust that allows for Medicaid qualification. When the applicant’s gross income exceeds the income cap, the applicant and or their family should hire an elder law attorney for assistance. Visit our website for Medicaid income and asset limits.

Lie #6: If my loved one goes into the nursing home we can simply place her money into a Trust

Many people hear about asset protection and the five year "look back" period and think that placing assets into a "special needs trust" of some type will protect assets. While special needs trusts exist for Medicaid planning purposes, there is no magic special needs protection trusts as most people may think. There is a pooled special needs trust which can be helpful, but it is not an asset protection device to protect assets for children's inheritance purposes. There are, however, great asset protection planning options that can help, even when your elder is already in the nursing home or assisted living facility, even within the five year “look back” period. A good board certified elder law attorney can assist with Medicaid asset protection planning.

Lie #7: You should avoid an attorney and get a cheap or free power of attorney from the internet

One of the most important estate in and capacity planning documents that you can create is a durable power of attorney. Going the cheap route by visiting a free or low-cost website, or even an inexperienced attorney, may cost your family thousands and thousands of dollars. The reality is that a great durable power of attorney, which includes many advanced options for asset protection, will be necessary under many circumstances. Thus, get your estate planning done with a good elder law attorney who knows how to protect assets. If you have a bad power of attorney, you may not know it and it may be too late to protect assets in the event the elder becomes incapacitated.

Bonus Lie #1: The Nursing Home will take all of mom's money!

While the nursing home can be very expensive, it never actually "takes" anyone's money. The resident must simply pay for their stay until they become eligible for Medicaid benefits. If you have the money to pay, you can just pay. If you want to protect assets from the nursing home, you should see a good elder law attorney.  It is never too late to protect assets and apply for Medicaid!

Bonus Lie #2: If my spouse is in the nursing home, I should divorce him/her so I do not go broke

We have a lot more on Medicaid and Medicaid/divorce on this blog post. Basically, there are legal ways to protect assets from the high cost of nursing home care without one spouse divorcing the spouse in the nursing home.  All you need is a good elder law attorney to help.

Bonus Life #3: If My Mom is in the Nursing Home, the Home Loses Homestead

One main aspect of Medicaid is that the home is not a countable asset unless over $713,000 in value (2024). But if the elder cannot stay at the home, the home is still kept as their homestead and will not lose its homestead status unless the elder rents their home out. Your elder could be in the nursing home for many years and the home would still not lose its homestead status. You may want to consider placing your home into an irrevocable trust under certain circumstances, however.

Can We Help You?

If you or your loved one is in a Florida nursing home, now may be the time to talk to a good elder law attorney. Our law firm has done thousands of Medicaid applications and we may be able to help, no matter where you live.  We charge $400 for an office consultation to see if we can assist your family in a difficult time.

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If you or your family member is looking to protect their assets from the nursing home, please download our free books:

D. Rep DeLoach III
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Estate Planning and Board Certified Elder Law Attorney
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