Sometimes, people are led to believe that, if they (as a single individual) or their spouse, go into a nursing home, the nursing home can take their house or other assets to pay for care. They ask, “Will I lose my home to the nursing home?” In Florida, this does not have to be the case.
In order to qualify for Medicaid (to help pay for long term care such as a nursing home or assisted living facility), the person applying for Medicaid cannot have more than $2,000 in assets (assets are cash, investment accounts, cash value on life insurance, etc.) and you cannot have more than $2,199 (in 2016) of income. Your homestead and one vehicle are considered “exempt” and do not count toward the $2,000 assets you are allowed to have for Medicaid purposes.
As a single person, if you own a house and you go into a nursing home, you can keep your house – you do not have to sell it. However, if you have a mortgage, or you do not have someone who can help you take care of the house while you are in the nursing home, you may need to sell it. This is because your income is going to pay the nursing home and there is nothing left, in many cases, to pay a mortgage or the taxes and insurance on the home.
As a married person, if one spouse is in the nursing home, and the other spouse (community spouse) is able to live in the home, then the house is usually safe. If the community spouse has low income, and needs the income of the nursing home spouse, in many cases, it is possible to divert some of the income of the nursing home spouse to the community spouse.
Many times, people want to know whether they can rent out the house to help pay for the expenses if the owner is in a nursing home. If you do this, you will very likely lose the homestead tax exemption, and you turn the property from an “exempt” asset to income producing property. The income from income producing property counts toward the $2,199 the Medicaid applicant is allowed to have (and much of it may go toward nursing home bills). There are a few things that can be deducted from the income, such as taxes, insurance and some maintenance, but the rest is income and is used to pay the nursing home.
Also, converting the house from an “exempt” homestead to income producing property may make the house subject to a lien by Medicaid after the Medicaid recipient dies if the house goes through probate. In Florida, if your house is your homestead (as defined by the Florida Constitution), it is protected from creditors at your death, even from Medicaid, and even if it goes through probate. However, income producing property is not protected from creditors, and if it goes through probate, Medicaid will have a lien against it.
If you have questions about nursing home Medicaid, protecting your assets from spending them down on a nursing home, or probate questions, please call us at 813.438.8503 for a free phone consultation. Or online you can contact board certified elder law attorney, Laurie E. Ohall, PA.