Common Questions about Florida Elder Law
You have landed in the right spot if you have questions regarding nursing homes, social workers, doctors, Medicare, Medicaid, asset protection, elder care navigation, and other elder law matters. Our elder law attorneys have answered many of the common questions we hear in the following FAQs.
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Can I move my mom into a nursing home while her Medicaid application is pending?
When your loved one is having health issues, it can be difficult to make the decisions on getting good care and thinking about how government benefits, such as Medicaid, can help. Medicaid is a part of our social safety net to help the needy pay for the cost of long-term care. Medicaid can help pay for nursing home care, assisted living or in-home care, but the asset and income rules, among other matters, are strict for those applying.
Sometimes, the elder is living at home and the family cannot help any longer or the elder is just too needy to be home safely. This may mean that the elder must go directly to a nursing home due to their long-term care needs. But can an elder apply for long-term care Medicaid before moving to a nursing home? The basic answer is NO.
Nursing Homes May Not Accept a Medicaid-Pending Resident
In the best-case scenario, a person will apply for Medicaid well before they need care, but there is a wait-list for long-term care benefits at home. This may mean that the elder does not come off the wait-list before needing to transition to a nursing home, which may mean that you cannot apply for Medicaid until the elder is actually in the nursing home.
When someone applies for Medicaid, this is generally known as being "Medicaid pending." But you cannot be Medicaid pending until you are:
- In a nursing home (i.e., skilled nursing facility/rehabilitation facility); and
- You have actually applied for Medicaid.
Unfortunately, most long-term care facilities will not someone who comes into the facility unless the are private paying. All of this is confusing but the big picture is that if the elder does not have money, placing into a nursing home is difficult without private paying. The reasons are as follows:
- The nursing home might not be reimbursed. There's no guarantee that a pending application will be approved. Nursing homes may be unwilling to take on a resident without a guarantee of benefits from the government to offset their costs.
- Approval may not be retroactive. Even if a resident is approved for Medicaid, there's no guarantee that they will receive retroactive benefits. If benefits are only provided for the future, the resident and their family will have to pay for any costs incurred between the date of admission and the date of approval.
- Eligibility may be deferred. Many Medicaid applications contain errors, discrepancies, or incomplete information, causing problems that defer eligibility. Medicaid generally won't cover any delays due to application mistakes, so costs will fall on the resident for care received during this time.
Of course, there are many situations where families may be unable to wait for government assistance before moving an elder into a nursing home. If your loved one's care needs are changing, our legal team can answer your questions and help you secure the benefits you need. When an elder law attorney is helping the family apply for Medicaid, a long-term care facility may accept someone Medicaid pending as the facility will trust the elder law attorney's representations that the elder will get Medicaid.
If you want help, simply fill out our quick contact form or call DeLoach, Hofstra & Cavonis at (727) 397-5571 to set up a consultation.
What's the difference between a Medicaid specialist and an elder law attorney?
Medicaid can be a lifesaver when it comes to paying for nursing home care. Unfortunately, the various requirements for the program can be extremely confusing, and you may need help with the application process. Elder lawyers and Medicaid specialists can both help you apply for Medicaid, and the right one for you will depend on your specific circumstances.
What Do Medicaid Specialists and Elder Law Attorneys Do?
First, let's talk about Medicaid specialists. These can be individuals or whole firms that specialize in Medicaid eligibility and application. For a fee, they can gather the documents you need to apply, submit your application, and follow up with you as the application moves through the system.
However, Medicaid specialists are not lawyers. They don't help with the many issues that usually arise along with the need for Medicaid, and can't offer legal advice if something goes wrong.
An elder law attorney does all of the above, plus:
- Protects healthy spouses. If your loved one is married, but their spouse does not require long-term care, the spouse's assets may be counted against Medicaid eligibility. An elder law attorney can protect spousal income and assets over the Medicaid limit and ensure a spouse can continue living in the family home.
- Helps your relative create an estate plan. Without an attorney's help, families may spend their loved one's life savings on care—but it doesn't have to be this way. An elder attorney who practices estate planning can set up trusts and other structures to ensure that there's something to pass on to heirs.
- Performs incapacity planning. Attorneys can create an enforceable plan using durable powers of attorney and designation of healthcare surrogates if your loved one becomes unable to make decisions on their own.
- Helps you through elder care navigation. There are invaluable legal services related to aging, such as choosing the facility that will preserve your loved one's dignity and independence, securing in-home care, preventing elder abuse, and ensuring the best care for the best price.
At DeLoach, Hofstra & Cavonis, our goal is to help your whole family through the most difficult times in their lives. We have completed thousands of Medicaid applications while protecing our clients and protecting assets. If you need help qualifying or applying for Medicaid, simply fill out our quick contact form or call us at (727) 397-5571 to set up a consultation.
How does working with an elder law attorney benefit my kids?
People often seek out elder lawyers when they are in the midst of a dire situation. They may need immediate help to protect a senior’s health and finances, or are looking for ways to pay for long-term care without sacrificing their life savings.
While these are certainly matters an attorney can handle, they are capable of doing far more—especially if you meet with them sooner rather than later. An experienced elder law attorney doesn’t just help you, they can give you the answers you need to help your entire family.
Working With an Elder Law Attorney Now Will Benefit Your Kids Later
Unfortunately, those who fail to plan ahead unknowingly place the burden of their care and debts on their children. The bulk of your estate may be used to pay for medical bills and nursing home care, leaving your heirs without an inheritance. An elder attorney’s advice is well worth having, especially if they can save your family thousands of dollars and avoid future legal headaches.
Our elder law services can help you:
- Qualify for Medicaid. We use a variety of estate planning methods to plan for future care needs, such as creating a trust to safeguard your property while Medicaid pays for assisted living. Simply put, elder law attorneys know how and when to protect assets, either in a time of crises or 5 years before Medicaid is needed.
- Provide for a surviving spouse. We can create a plan for married couples to ensure the surviving spouse will have money left over once the estate is settled.
- Save your family’s home and assets. We ensure all documentation is compliant under Florida state law, and that your plan will work correctly if you become incapacitated or pass away. This prevents potential legal battles over your estate that could drain your assets.
- Secure your health and wealth. Creating the right legal documents now ensures that the right people will have decision-making authority over your funds and healthcare. A power of attorney, living will, and guardianship designations are just a few ways to protect an older relative now and at the end of life.
At DeLoach, Hofstra & Cavonis, we help whole families through the most difficult times in their lives. Simply fill out the quick contact form on this page to set up a consultation and get answers to your questions.
When should I consider getting guardianship over my elderly parent?
Most people who wish to establish guardianship have already taken on the duties of caring for an ailing loved one. You may be cooking their meals, running them to hospital visits, or picking up their mail and paying bills on their behalf. However, there is a limit to how much you can legally do for your parent without the proper authority—and it is generally best to get this authority sooner rather than later.
Warning Signs That You May Need Guardianship Over an Elderly Relative
The choice to get legal control of a parent’s affairs can be unsettling, and can lead to family disagreements that push the decision, and the elder's safety, down the road. Unfortunately, putting off guardianship proceedings may force emergency action when your parent hits a crisis point, adding to your stress and discomfort in an already difficult time.
There are a few ways to tell if it’s time to start the guardianship process. For example, you may need legal help if there is a threat to your parent’s:
- Safety. Guardianship can help if a parent is suffering from a medical condition that often results in long-term decline (such as dementia, cancer, or organ failure) and he or she does not realize that they are unable to make the correct health care decisions.
- Life savings. The elderly are often targeted by scammers, caretakers, and even relatives looking to profit from their vulnerability. If you have seen strange transactions in your parent’s accounts or fear that someone is trying to gain access to their money, you should speak to us about guardianship.
- Health and well-being. If your parent has not appointed someone to act as the health care surrogate and the family does not get along, you will need guardianship to make decisions about their healthcare, housing, and long-term care. Under Florida law, if the elder has not created a health care surrogate, then the family would generally make decisions as the elder's health care proxy. But if the family does not get along and they do not agree on the health care decisions to be made, it is likely that a guardianship attorney would be necessary.
- Lack of Pre-Planning. Guardianships can often, but not always, be avoided through the proper estate planning. If your loved one has not created a durable power of attorney, for instance, and then loses capacity, then a guardianship will be needed to handle his or her affairs.
Lack of Capacity Standards for Guardianships
When a guardianship is sought, the court generally needs to find that the alleged incapacitated person lacks capacity. Here, an “incapacitated person” means a person who has been judicially determined to lack the capacity to manage at least some of the property or to meet at least some of the essential health and safety requirements of the person. Further,
- To “manage property” means to take those actions necessary to obtain, administer, and dispose of real and personal property, intangible property, business property, benefits, and income.
- To “meet essential requirements for health or safety” means to take those actions necessary to provide the health care, food, shelter, clothing, personal hygiene, or other care without which serious and imminent physical injury or illness is more likely than not to occur.
What is voluntary guardianship in Florida?
Most people who wish to establish guardianship are relatives of a loved one who is incapacitated. However, some family members realize that they're incapable of handling certain financial matters on their own, and wish to surrender control of their affairs willingly. If you're unable to manage your finances, Florida law allows you to seek voluntary guardianship over property and assets.
Benefits of Voluntary Guardianship in Florida
The greatest benefit of guardianship is that it helps to protect your assets from those who would take advantage of you if you suffer an illness, are diagnosed with dementia, or have a progressive health condition that prevents you from making your own financial decisions.
There are other advantages to voluntary guardianship of property, including:
- Choosing your guardian. People suffering from illness may not recognize their inability to handle their affairs until it’s too late, forcing their families to step in and begin guardianship proceedings. A voluntary guardianship gives you the ability to choose who will serve as your guardian now, instead of taking a chance that a relative you might not trust will seek guardianship later.
- Setting your own limits. Taking action now allows you to control how much of your property is handled by your guardian. You may give your guardian authority to manage specific assets, such as stocks, or the entirety of an estate, and can choose how long the voluntary guardianship remains in effect.
- Protection of the courts. If you simply hand over control of your finances to a family member, there are no restrictions in place to prevent them from using your assets for their own gain. Voluntary guardianship is supervised by the courts, so your chosen guardian will be legally required to manage your affairs in a way that benefits you and your estate.
You should know that the state of Florida only recognizes voluntary guardianship over property. A voluntary guardian won't be able to make medical decisions on your behalf nor choose where you'll live. If you wish to give your guardian medical authority, you should consider including a durable power of attorney as part of your estate plan.
When would you want a Voluntary Guardianship?
Most estate planning is done to avoid any type of guardianships, but there are times when estate planning alone cannot stop people from hurting themselves. Here is an example of when we would think a voluntary guardianship would be helpful:
Mom, age 84, is getting forgetful but is still legally competent. She has a trustworthy daughter who lives locally but she also has a difficult son with "spending problems" who shows up to beg his mother for money. Mom is just not able to say "no" to lending (or giving!) her son money. The son has even taken mom to see an attorney to try and become her power of attorney. While mom is competent, placing her assets under a voluntary guardianship may be the best way to make sure mom cannot take her own money and just give it to her son.
Alternatives to a Voluntary Guardianship
While every situation is different, it is possible that a good estate plan can prevent a guardianship, such as through creating a revocable living trust and naming a trusted person as the trustee. But this has limitations if, for instance, the elder is subject to bad influences from close family members, as an example.
The attorneys at DeLoach, Hofstra & Cavonis, P.A. can meet with you, listen to your concerns and help discuss options to make sure you or your loved one is protected.
How Can I Stop My Loved One From Writing Checks?
We frequently receive questions regarding children trying to help when their parents going starting with dementia or Alzheimer's. The question is frequently something like:
I have durable power of attorney for my mother, but she keeps writing checks and making poor financial decisions when I’m not around. What do I do?
We have seen situations like this many times - Mom or Dad is getting forgetful, some type of dementia, and is not spending her money well. He or she may be writing checks to charities, scammers, needy family members, etc.
So, while durable powers of attorney are an important part of a well-rounded estate planning, they do have one major shortcoming: A durable power of attorney appoints an agent to act on behalf of the Principal (e.g., Mom or Dad), but it does NOT stop the Principal from still conducting business on his or her own. We frequently say that a durable power of attorney is a delegation of your rights, but it does not actually take away your rights.
The big picture is that a durable power of attorney is not really enough to stop someone with dementia from being taken advantage of. The power of attorney cannot stop mom/dad from writing checks/paying bills. There are some things that can help in these difficult situations:
Set Up a Revocable Living Trust
If Mom or Dad does not already have a revocable living trust, then the durable power of attorney may allow the child to set up and fund a revocable living trust in order to help Mom or Dad. Florida law says that a durable power of attorney executed after October 1, 2011, must specifically be initialled to allow the power of attorney to execute a living trust on mom/dad's behalf. Assuming this power is available, as power of attorney, the child may be able to transfer the parent’s assets into the trust and then manage the trust as trustee. Only a trustee can conduct business on behalf of a trust, therefore, the parent would not be able to write checks or conduct financial transactions for any assets that are in the trust.
Of course, we strongly recommend that you consult with an attorney regarding this option and whether the child is legally authorized to establish a trust on your parent’s behalf.
The next step may be to consider an adult guardianship proceeding. A guardianship proceeding will include an incompetency hearing. If the court finds your parent to be incompetent, the clerk of court will issue an order of such finding and will appoint a guardian to manage your parent’s affairs. You can then give copies of the court order to all banks and financial institutions where your parent holds accounts to notify the bank or financial institution that your parent has been declared incompetent by the court and no longer has legal authority to conduct transactions on his or her own behalf.
We typically recommend guardianships as a last resort only - if Mom/Dad is highly functioning (i.e., can go to the bank themselves and refuse to give up the car keys/check book), is not recognizing their own dementia, for instance, or if they are subject to elder exploitation. Florida also has an elder exploitation injunction that can help people when they are being exploited.
We Can Help!
You may be struggling to help your loved one make the right decisions, hitting roadblocks, looking for Medicaid, waitlists in trying to get your loved one placed in an appropriate facility, or constantly fighting with doctors, hospitals (or even other family members) because you don’t have the necessary legal or financial authority to oversee your loved one’s affairs and/or care.
Solid legal and financial planning is your answer and can help you put an end to all of the confusion and overwhelm that you currently face.
If you read this, you may want to read:
- How Your Estate Plan can help prevent elder exploitation
- When Durable Powers of Attorney Cannot Prevent a Guardianship in Florida
- Emergency Temporary Guardianships in Florida
How is VA Pension counted for Medicaid purposes?
This is not an easy answer as you may think!
When someone is on long-term Medicaid in Florida, there is both an income and asset limit for eligibility. The financial guidelines are provided at this link. Medicaid counts the applicant's gross income for qualification purposes. When income exceeds the income cap, a qualifed income trust is necessary in order to qualify for long-term care Medicaid.
But what about when the Medicaid applicant is receiving VA Pension? VA Pension can be very helpful for paying for an elder's assisted living or in-home care. VA Pension Benefits are outlined here. The highest Pension benefit is known as "aid and attendance," with monthly benefits as follows (2023):
- Married Veteran: $2,642/m
- Single Veteran: $2,229/m
- Surviving Spouse: $1,432/m
But if someone is applying for Medicaid, how much of the Pension income is countable for gross income purposes? The answer is NOT ALL! Medicaid excludes "aid and attendance" income from the gross income calculation. But the answer does not even stop there - Aid and Attendance is only the highest level of VA Pension benefits. Lower levels are "base pension" and "housebound." Interestingly, the very base pension amount is countable as income for Medicaid purposes. For 2023, base pension levels are as follows:
- Married Veteran: $1,750/m
- Single Veteran: $1,336/m
- Surviving Spouse: $ 896/m
If you really want to learn more about VA pension rates, here is a link to the VA webpage which gets into more detail.
An example of how VA interacts with Florida long-term Medicaid is as follows:
Surviving spouse of a wartime veteran is receiving $1,432/m in VA Pension Aid and Attendance (the maximum). Her gross Social Security income is $1,500/month. Her income for Medicaid purposes towards the income cap ($2,742/m in 2023) is $2,396/m. This means that she does not need a QIT to obtain or keep Medicaid benefits. ($1,500 plus $896 (the base pension amount) = $2,396/month, which is lower than the Medicaid income limit). Notice that only the $896/m is counted as income for Medicaid purposes, not the full $1,432/m that she receives from the VA.
When you are applying for Florida Medicaid and VA Pension benefits are already coming in (mostly meaning Aid and Attendance) then these calculations will be very important.
It is also important to note is that if the elder receives Medicaid in the nursing home, the VA will need to be notified and then his/her VA Pension (including Aid and Attendance) will eventually be reduced to $90/month, which is not countable as income for Medicaid purposes. Make sure you notify the VA if your loved one is in the nursing home receiving Pension.
Also, VA Pension income does not include any VA Disability payments. VA disability payments (based upon an injury while serving our country) is countable income for Medicaid purposes, so it is important to know what type of VA income is being received. If/when applying for Medicaid, it is likely that that VA will provide a breakdown of income for Medicaid purposes.
VA Aid and Attendance from DIC Benefits
VA "aid and attendance" is a difficult subject because the names for VA benefits programs are not always helpful. We mostly look at Pension benefits for helping our veterans, but the VA program also provides benefits known as "aid and attendance" for those veterans that were injured in service and for his or her surviving spouse. The program for a surviving spouse, known as DIC (Dependency and Indemnity Compensation) provides $1,562.74 (2023) to the surviving spouse of a 100% VA disabled person. The surviving spouse can also get an addtional $387.15/month when they need help with their activities of daily living (eating, dressing, bathing, toiletting and transferring). This payment of $387.15/month is not countable income for Medicaid purposes
If you want to learn more about Medicaid benefits in Florida, please look here.
If I am on Medicaid, will Florida take my home upon death?
No, under most circumstances. 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. There are a few caveats here:
- Your last will and testament must not direct that your home be sold (not desire that it be sold, but a specific direction to sell); and
- Your home must not have been rented during your lifetime, which would cause it to lose its homestead status (although this has exceptions as well).
The homestead property can be sold and the proceeds can be protected, importantly, even if you/your loved one is on Medicaid already. 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.
You may also ask:
- What happens to my homestead if I go on Medicaid in Florida?
- My elder is on Medicaid - can we sell the homestead property?
If you want to learn more about asset protection in Florida, download a free copy of my book, Don't Lose Your Nest Egg to a Florida Nursing Home. This book will explain ways to protect your assets and pay for your long-term care, among other important aspects.
What happens to my home if I go on Medicaid?
The rules for Medicaid and homestead property in Florida have different rules depending on if you are single or married:
- Married Couple: With a married couple and one spouse applying for Medicaid, Medicaid does not look at the value for the home. The at-home spouse (the "community spouse") can live in the home, no matter the value, and it will not effect the Medicaid applicant spouse. Further, the cost of the home may help the community spouse keep more income. We may be concerned if the spouse at home - the community spouse - were to predecease the Medicaid recipient, but that is another issue.
- Single Person: If the Medicaid applicant is single and needs Medicaid in the nursing home or assisted living facility, the applicant is allowed to own a home of up to $688,000 in value (2023). 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). We have more on Medicaid estate recovery here. Problems can occur though because all of your income goes to the nursing home as part of your patient's responsibility. This means that your family will have to pay for the home's mortgage, upkeep, insurance, taxes, etc., as your assets have been depleted and your income goes to the nursing home! Renting the home is possible but this removes the homestead protection, so that can be an issue as well.
We have more information on Florida Medicaid income and asset guidelines here.
If you want to learn more, please see the following:
- Our Free Guide to Protecting Your Florida Homestead.
- Selling your homestead in the event you are in the nursing home
- Florida Medicaid Spend-Down Planning
Our website has a lot of information on homestead, Medicaid, asset protection and more. Please take your time navigating this website as there is a lot to learn and there are many rules.
Want a Consultation?
We charge $200 for a consultation with one of our elder law attorneys. In that consultation, we will help decide any outstanding issues you may be facing. We have helped people all accross Florida and we are glad to help you and your family as well.
If my spouse is in on Medicaid, how much of my income can I keep?
If your spouse is in the nursing home on Medicaid (the "institutionalized spouse"), you are allowed to keep ALL of your income. Medicaid allows the spouse at home (the "community spouse") to keep all of their income.
The next question is what income can the community spouse keep of the institutionalized spouse? The big picture is that the community spouse can divert up to $2,030/month (2018) from the institutionalized spouse's income with a maximum amount diverted up to $3,020.50/month. The amount diverted depents upon the community spouse's own income and the amount of housing costs the community spouse has.
When your spouse is in the nursing home, it can be a very stressful time. Find our more about the Florida Medicaid and Spousal Diversion on this webpage.
If you are reading this, you may want to read:
What is the difference between Medicare and Medicaid?
When you or your loved one has gone to the nursing home for rehabilitation, which frequently occurs after a three (3) day hospital stay, the family has to learn the difference between Medicare and Medicaid.
Simply put, Medicare is a form of health insurance for those over age 65 and the disabled. Medicare pays for someone's doctors, hospital stay, medical supplies, etc. No health insurance is long-term care insurance and Medicare is no exception. Medicare can pay for up to 100 days of rehabilitation in a skilled nursing facility after the patient had a three-day qualifying stay in the hospital. The point of the rehab is to get the patient stronger through therapy. When the patient is no longer getting stronger, Medicare will typically end. Medicare completely covers days 1-20 while co-pays of $185.50 (2021) are for days 21-100. If the patient has a Medicare supplement (i.e., a Medigap policy), the policy may pay for the co-pays during the patient's stay. Most people who work during their lifetimes will get Medicare.
If the elder has to stay in the nursing home after Medicare ends, the patient may need to apply for Medicaid. Medicaid is the government program that helps the indigent pay for their care in a long-term care facility, such as the nursing home or assisted living facility. In order to qualify for Medicaid, the applicant must pass a strict test looking at the applicant's income and assets. We have the most recent Medicaid income and asset numbers for Florida here. When the elder is in a nursing home, now may be the time to protect assets for his or her care, which is done through a good elder law attorney.
If your loved one just entered the nursing home, or may not be safe at home, you may also want to read:
- Questions to ask when your elder just entered the nursing home
- Will my loved one get good care on Medicaid?
Finally, we have a free book that may be be able to help. Please download Protect Your Nest Egg from a Florida Nursing Home today.
My Elder is receiving VA Benefits - can we sell or rent the homestead?
If your elder is receiving VA pension benefits, which typically means Aid and Attendance, he or she is allowed to own a home as a non-countable asset. A problem may occur if the elder is not living and home and the family wants to sell or rent it. Selling or renting the home will most likely stop the VA pension benefits as you would be converting a non-countable asset into a countable asset. The VA cross-references with the IRS and they will find out about the home sale, so you should do something to help.
It is likely that the best solution to selling or renting the home when an elder is on VA benefits is to place the property into an irrevocable trust. This trust has a lot of potentially positive benefits in the right situation, such as:
- Avoiding probate upon the elder's death;
- Allowing the property to be sold tax free (if it has appreciated less than $250,000);
- Allowing rental or the property while the elder is in a nursing home/assisted living;
- Allowing a step-up in basis upon the elder's death so heirs can sell it tax free;
- Starting the Medicaid five year "look-back" period;
- And more . . .
If your elder is looking to apply for VA benefits, or if you just want to consider protecting the homestead property from the nursing home, please fee free to download a copy of my free report on protecting your Florida homestead property.
How are IRAs counted for Medicaid purposes?
When an elderly or disabled person is looking to apply for long-term care Medicaid in Florida, the applicant must document their income and assets for Medicaid purposes, which are set forth in our asset and income levels webpage. Generally, a single person is only allowed to have some $2,000 in countable assets while a married couple will be allowed some $128,000 (this amount changes every year) in countable assets.
Part of the application process means looking at countable assets. Countable assets include bank accounts, stocks, bonds, mutual funds, annuities and more. Basically, the applicant must disclose all assets as part of the process. Interestingly and importantly, the applicant's IRA/401K/Qualified Plans may not be a countable asset for application purposes. The rule is that if the applicant is taking periodic distributions from their IRA/401K/Qualified Plans, the account is not a countable asset for Medicaid purposes. Instead, any distributions from the account are counted as income for Medicaid purposes. This would mean, for instance, that any distribution from the IRA/401K/Qualified Plan may go to the nursing home as part of the patient's responsibility. This would also mean that any distributions from these plans could require a Qualified Income Trust, among other important ramifications. The application of this rule can be pretty tricky, with an example as follows:
Example #1: Mom is an unmarried nursing home resident and has $50,000 in her checking account and $50,000 in stocks and bonds. Her gross income is $2,000/month from Social Security. In order to get Medicaid to pay for mom's nursing home care, she is only allowed $2,000 in countable assets, meaning that she must spend down most of her assets (some $98,000) before Medicaid will assist her. Of course with a good elder law attorney, assets can be protected from the nursing home.
Example #2: Same facts but mom only has $10,000 in her checking account and $90,000 in her IRA. If mom is taking period distributions of $300/month from her IRA, she will only have the checking account as a countable asset for Medicaid purposes, with the IRA not counting as an asset. Interestingly, the $300/month coming from the IRA will take mom over the income cap for Medicaid purposes, meaning she will need an income trust in order to get Medicaid. Also, any distributions from the IRA will be countable income for Medicaid purposes, which means that mom will not be able to take money out of the IRA once she is on Medicaid to use it for her benefit!
In both examples, mom or her family would want to see a good elder law attorney to assist with the Medicaid application and possible protection of assets. In example #1, the elder law attorney may be able to help the elder legally spend down the assets. In example #2, an elder law attorney would be needed to help establish the Qualified Income Trust, among other things.
Interestingly, the concept of the IRA as income an not an asset may present further problems. Once the applicant receives Medicaid, only the RMD can be taken out without effecting Medicaid substantially. If the elder wants money for their own spending, to pay for their funeral expenses or even to pay for their own home, once that person is on Medicaid, any distribution from the IRA will create problems. When an elder needs Medicaid and their sole asset is an IRA, we frequently work to make a larger distribution the month before we need Medicaid in order to have some funds set aside. A good elder law attorney can help protect the assets and apply for Medicaid.
As we can see, an IRA would generally not need to be protected from nursing home spend down as long as the applicant is receiving their required minimum distributions. If you want to learn more about spending down assets from long-term care Medicaid, we have more information here.
There are no easy Medicaid applications and every situation is different, but if you or your loved one needs help to pay for their long-term care, we can help you. We can help you from anywhere in Florida as well.
People who read this may also want to read:
- Bypassing the Florida Medicaid Waitlist for Assisted Living Facilities
- My loved one is in the nursing home - is it too late to protect assets?
- Asset Protection and Florida Medicaid Planning
Download my Free Book!
If you want to learn more about Medicaid and asset protection in Florida, or are helping your aging loved one and need some help, please feel free to download our free book, Don't Lose Your Nest Egg to a Florida Nursing Home!
What is a designation of health care surrogate?
A designation of health care surrogate is an incapacity planning document naming your health care advocate. This, along with your living will, is known as an advance directive.
What is a designation of health care surrogate?
This is a form that designates your decisionmaker in the event you need help with your care, advocacy and end-of-life wishes. Some states refer to it as a power of attorney for health care.
Should I update my health care surrogate designation?
Yes, if you have not updated your documents since 2015. Florida law was recently changed to include new options relative to when your designation of health surrogate goes into effect. The pre-2015 law said that your surrogate designation only went into effect if a doctor declared you incompetent. The new law lets the surrogate designation go into effect when you sign it. This change makes it much easier to ensure you are getting the care you need and for your surrogate to speak with your doctor without a declaration of incapacity.
Example: Mom, age 86, develops a urinary tract infection that completely disrupts her cognition and function level. If mom had the post 2015 Florida Health Care Surrogate, her trusted daughter could immediately help make mom's health care decisions without the formal necessity of two doctors declaring her incompetent. In other words, the surrogate can act faster in helping make mom's decisions.
Can my power of attorney be different than my health care surrogate?
Yes. Your durable power of attorney is for financial and legal matters, while your health care surrogate designation is for health care decisions. You can name different people to assist you as you age, but you would certainly want to make sure they get along with each other and can work together.
Why should my health care surrogate designation be separate from my living will?
Our opinion is that your designation of health care surrogate should be in a separate written form from your living will. While every situation is different, we like the idea that an elderly person or someone with beginning stages of dementia may need to change their health care surrogate but may not have the desire to change their end-of-life wishes in their living will. This allows easier adjustments to estate planning documents and clarity for all.
Example: Mom is getting forgetful at age 92. Her trusted daughter has to move away and another daughter is to become the health care surrogate. Due to mom's mental decline, she can understand her health care surrogate change but she may not be able to understand (or even want to discuss) the nuances of her own end-of-life wishes in her living will. With separate documents, we can easily change the health care surrogate but not have to broach the very touchy subject of mom's end-of-life care wishes.
What else should I consider with health care surrogate designations?
Make sure your documents have alternate people who can help you. We have seen a number of incapacity planning documents lately without alternate agents. Please call me if you would like to create or update your existing health care surrogate designation. We also invite you to attend any of my free monthly estate planning seminars to learn more.
What if my loved on is incapacitated and did not create a health care surrogate?
See our section on Health Care Proxies in Florida for more information.
Learn more about Florida advance directives:
Where does my income go when I am on nursing home Medicaid?
Income rules for long-term care Medicaid have a number of moving parts that vary based upon marital status.
A single person on Medicaid in the nursing home must pay their countable income to the facility as part of his "patient's responsibility." In effect, the Medicaid applicant must pay their income to the facility as part of their co-pay, where Medicaid pays the rest of the funds for the resident's stay. The single applicant is allowed to keep $105/month as part of his "personal needs allowance." This allows the resident to buy personal items such as clothing and toiletries.
A married person in the nursing home has the same set of rules with one large qualification - the spouse at home may be able to keep some of the applicant's income as part of the community spouse's income allowance (CSIA). The community spouse may be able to siphon off some of the applicant's income based upon the community spouse's own income. An example of this is as follows:
Married nursing home resident with $2,000/month income applies for Medicaid. The spouse at home (the community spouse) only has income of $1,000/month. The spouse at home, as a minimum, may keep $1,030/month of the resident's income, at a minimum. This amount varies annually (see below for up-to-date numbers). This means that the nursing home resident can keep $105 per month as their personal needs allowance, paying $865/m to the nursing home as their patient's responsibility. ($2,000 minus $1030 minus $105 = $865).
If the applicant's gross income exceeds $2250/month, they will need a Qualifed Income Trust (QIT). The QIT generally does not effect where the income goes (i.e., to the nursing home/community spouse) but how it gets there.
We go into much greater detail about the Minimum Monthly Maintenance Allowance, the community spouse's income and the spousal spousal diversion on this page.
The Florida Medicaid financial requirements change frequently, with this post being the most up-to-date numbers for eligibility.
If your loved one is looking at long-term care or Medicaid in Florida, you are welcome to attend one of our free monthly seminars to learn more!