MIR Blog

MIR offers financial planning services designed to help elderly clients preserve their assets in safe investments so they may qualify for government financial assistance programs. MIR charges fees to assist elderly clients in submitting Medicaid applications, and we may receive commissions for annuities structured in the planning process. In 11 years filing Medicaid applications, we have never had an application denied.

We are not attorneys and do not offer legal advice or draft any legal documents. The decision to hire MIR is in no way equivalent to or a substitution for an attorney.

Alternatives to Keeping the Applicant’s Home While on Medicaid

You may already know that a Medicaid applicant’s Florida homestead is an exempt asset (as long as the home equity value does not exceed $525,000 for single cases or for married couples the spouse resides in the home if over $525,000) while they are residing in a Florida nursing home. This is because the Medicaid rules state that every nursing home resident has an “intent to return to their home,” even if that is not realistic.

Although the value of the home is exempt, the Medicaid program does not make provisions for helping nursing home residents pay ongoing expenses for their home such as property taxes, homeowner’s insurance, maintenance or utilities. Therefore, once the Medicaid applicant’s $2,000 asset allowance is depleted, family members must pay these ongoing expenses for the home. Some nursing home residents live for many years and these ongoing expenses can be a heavy, financial burden on the family.

The family might consider renting the home. Unfortunately, Medicaid counts rent as countable income which could cause a need for an Income Trust and the rental income must be paid to the nursing facility. Additionally, it can be stressful for family members to deal with finding tenants, handling repairs and reporting these details to Medicaid. In short, renting the home can also be burdensome.

If the home doesn’t have any particular sentimental value, it’s possible to eliminate the burden of the ongoing home expenses by selling the home and preserving the value for the heirs while continuing to receive Medicaid benefits.

How to Sell the Home, Preserve the Value, and Continue to Receive Medicaid Benefits

First, the family will sell the home at a fair price. Normally once a Medicaid beneficiary sells their home, the proceeds become a countable asset the following month after the home is sold. With our plan, we instruct the family as to how they can transfer the proceeds into the children’s/heirs’ names.

Typically, such a transfer would cause a penalty period and Medicaid benefits would be lost for some period of time. However, there is a legal strategy which permits the family to set aside funds for the benefit of the nursing home resident. This strategy also ensures that the funds are transferred in a manner that offers creditor protection should the children or heirs ever be subject to a lawsuit.

In summary, holding onto the house is not the only way to preserve the value of a Medicaid recipient’s home. If it is unlikely that the nursing home resident will ever return to their home, the family might consider selling the home and preserving its value. This way, the ongoing financial burden can be lifted from the family members.

Please note that preserving assets from the sale of a home requires expertise and experience. Families should consult with a knowledgeable Medicaid Practitioner such as Medicaid Information Resource prior to taking any steps to sell the home.