As you and your spouse age, there's the possibility that you might eventually need to be placed in a nursing home. Even if it's a long way off, it's important to consider it now. Why? The thought of paying for nursing home care can be overwhelming, especially when the costs threaten to drain a lifetime of savings. Many families in Florida assume they will have to spend everything before qualifying for Medicaid, but that’s not necessarily true.
With the right estate planning lawyer, you can create a plan to protect your assets while ensuring access to the care you or a loved one may need. Understanding how Medicaid works and taking proactive steps now can help you avoid financial hardship down the road.
How does Medicaid eligibility work in Florida?
Medicaid has strict income and asset limits, making qualifying difficult. In Florida, these factors play a role in determining whether someone is eligible for long-term care coverage:
- Income limits: As of January 2025, a single applicant can't have more than $2,901 monthly income. Married applicants can't have more than $5,802.
- Asset limits: A single applicant can’t have more than $2,000 in countable assets. However, married couples have more flexibility, allowing the healthy spouse to keep a larger share of the assets.
- Lookback period: Medicaid reviews financial transactions from the last five years. If you’ve transferred assets for less than fair market value, Medicaid may impose a penalty, delaying your eligibility for benefits.
Many believe they must spend down all their assets to qualify, but that’s not always true. There are legal strategies that allow you to preserve wealth while still meeting Medicaid’s requirements.
What strategies protect wealth from nursing home costs?
Florida offers several Medicaid planning options that allow you to protect your assets while qualifying for benefits.
- Medicaid-compliant asset transfers: If you give away money or property within five years of applying for Medicaid, you could face penalties. However, transfers are allowed, such as those to a spouse, a disabled child, or a special needs trust.
- Irrevocable trusts: Placing assets into a Medicaid asset protection trust removes them from your ownership, meaning Medicaid won’t count them when determining eligibility. However, these trusts must be created in advance to comply with Medicaid’s lookback period.
- Spousal protections: When one spouse needs nursing home care, Medicaid allows the other spouse (the community spouse) to keep a portion of the couple’s assets and income. This ensures the healthy spouse isn’t left financially vulnerable.
- Exempt assets: Not all assets count toward Medicaid’s limits. A primary residence, a car, personal belongings, and prepaid burial plans are excluded. Knowing what Medicaid considers exempt can help you avoid unnecessary spending.
- Medicaid-compliant annuities: Converting excess assets into a Medicaid-approved annuity can provide a steady income stream while preventing those assets from affecting Medicaid eligibility. These annuities must meet specific legal guidelines.
Common Medicaid planning mistakes
Many people unknowingly make errors that cost them valuable time and money. Some of the most common Medicaid planning mistakes include:
- Making last-minute asset transfers: If you give away assets without proper planning, you may trigger Medicaid’s penalty period, delaying your access to benefits.
- Relying on joint accounts: Adding a family member’s name to a bank account doesn’t remove those funds from Medicaid’s consideration. These assets can still count against eligibility limits.
- Ignoring the lookback period: Medicaid carefully reviews financial transactions from the past five years. Any improper transfers could lead to penalties.
- Following incorrect advice: Medicaid laws change, and misinformation can lead to costly missteps. Consulting a professional helps ensure you follow the right legal strategies.
When should you start Medicaid planning?
The best time to start Medicaid planning is before you need nursing home care. While some strategies can be applied in a crisis, advance planning provides more options for asset protection. Plus, it allows you to structure your assets to preserve wealth while complying with Medicaid rules.
Additionally, by starting at least five years before you need care, you can transfer assets legally without facing Medicaid’s penalty period. Without a plan, your loved ones may have to make difficult financial and legal decisions under pressure. Proactive planning eliminates uncertainty.
How can a Medicaid planning lawyer help?
Fully understanding Medicaid’s rules can be complicated. A Florida Medicaid planning lawyer at The Levy Firm PLLC in Boca Raton can help you structure a plan that protects your assets while ensuring you qualify for benefits when the time comes.
Everyone’s financial situation is different. That's why we focus on your specific needs. We can help you prepare all required documentation, assist you with your application, and adjust your plan to keep it compliant with Medicaid law changes.
If you or a loved one may need nursing home care in the future, don’t wait until it’s too late to protect your assets. Contact us online or call our Boca Raton law office today for a free consultation and discover how our personalized approach to estate planning can help you avoid legal troubles and ensure your wishes are carried out exactly as you intend.
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