A person requiring nursing care may need Medicaid. One can qualify for Medicaid if the person’s assets (and those of the spouse, if any) are less than the value permitted by the Medicaid program.Homestead property is exempt, with limitations. Unless the applicant has a spouse or a child under 21, or a disabled child of any age living in the home, the home is not exempt if equity in the home exceeds $543,000.
The home is exempt for Medicaid qualification even if the applicant is single and never returns to the home. And, if one reports the reason for the absence to the county tax assessor, one can retain the homestead tax exemption. But there is a bit of a catch-22. If one is in a nursing home, and receiving only $35 per month in income, there is no money to pay expenses on the home. If the home is sold, the cash will be available. If the home is rented, it will be available for Medicaid purposes, and will also be ineligible for the homestead tax exemption.
If the applicant changes the title in any way within five years before qualifying, or after qualifying, by adding a name to the title, or creating a traditional life estate, the Medicaid program considers it a transfer of assets, and eligibility will be lost.
Homestead in Florida has many different meanings. The Florida constitution provides protections unlike any other. One of those protections is that the home passes to heirs at law free of the claims of creditors, including Medicaid. If Medicaid pays for one’s care, it can file a lien in the estate after death (unless there’s a living spouse). But just like any other creditor, Medicaid does not have a lien upon the home if the recipients are heirs at law to the applicant.
It is not always possible to retain the home after entering a nursing home, but laws do allow the home to be retained and still receive Medicaid assistance.