Managing asset limits is among the chief concerns families have when a senior needs Medicaid. While Medicaid offers a lifeline for nursing home care or home services, the asset limits are strict.
One of the first questions people ask is about preserving the family home. Fortunately, the Florida homestead exemption is more than a property tax break. A senior’s homestead can also receive protection from Medicaid. This post will cover what families need to know about the Florida homestead exemption and Medicaid.
The Basics of the Florida Homestead Exemption and Medicaid Rules
The Homestead is an Exempt Asset
Medicaid has a strict asset limit of $2,000 for single individuals. However, there are many assets Medicaid doesn’t count toward eligibility. The senior’s primary residence is the most significant non-countable asset. However, the applicant must have an ownership interest in the property. Additionally, there are residency requirements and home equity limits that may apply. We’ll explore these issues later in this post.
Residency Requirements
The residency requirements are a key component of the homestead exemption under Medicaid. If the applicant remains living in the home, it is exempt from this requirement. The property can also maintain the exemption if the applicant moves to a nursing home, but can demonstrate an intent to return. A spouse or a disabled child living in the home allows the home to maintain its eligibility for the exemption. Other family members with various interests or connections may also qualify.
Home Equity Limits
While homesteads are typically exempt, there are circumstances where home equity limits may apply. These limits may be significant if the applicant is single and has no qualifying dependents living in the home. However, the equity limits are also high. As of this writing, the limit under these circumstances is $730,000. The limit typically increases over time. If the home exceeds the equity limit, it could become a countable asset, potentially disqualifying the individual from benefits.
Medicaid Estate Recovery
Medicaid estate recovery is another issue concerning many families. Under estate recovery, the state seeks reimbursement from a Medicaid recipient’s estate upon their passing. However, Florida’s homestead exemption provides valuable protection. The home is exempt from estate recovery if it passes to a child, spouse, or another close family member. That said, there are ownership requirements and restrictions on selling the property.
Seniors can depend on the homestead exemption to protect their primary residence, but it isn’t perfect. The requirements are strict, and there can be gaps. It also only protects the homestead property. That may leave families wanting additional forms of asset protection. With careful estate planning, you can protect and preserve more of your assets while obtaining eligibility.
Does your family need help managing Medicaid eligibility for a loved one? The experts from the Scott Law Offices can help. Reach out now to learn more about asset protection strategies and Medicaid eligibility.
