This is quite possibly the most common misconception about medicaid. The statement that medicaid is for poor people is false. With over 30 kinds of medicaid in Florida, the ICP ( institutional care program) or nursing home medicaid is not for poor, homeless or indigent people. In fact the state of Florida does not believe in impoverishing both the husband and wife in order to take care of one. Presently with the cost of a nursing home in Florida ranging from $8,000-$ 12,000 per month ICP, medicaid can help keep the well spouse also known as the ‘community spouse’ stay in the home. Exempt assets in Florida are : Homestead A Car IRA, 401K, 403B ( The required minimum distributions are considered income) Rental Property ( the net monthly rent is considered income) Term life insurance Prepaid burial /cremation ( must be made irrevocable) Myth One button description on how the myth began.

The garden variety of trust is the living trust or revocable trust set up by an individual as part of an overall estate plan. It can carry the Social Security number of the individual who sets it up, known as the Settlor of the trust. There are misconceptions of the effect of placing items in the revocable trust. A revocable trust does not protect you or your assets from any tax consequences nor does it protect your assets from creditors. It is a vehicle to assist a transition in the estate when someone dies or becomes disabled and has a stand by person who can take over. It can also simplify the transfer of real estate, especially in another state, by a successor if the Settlor is deceased or disabled. In the Medicaid arena, a revocable trust is disregarded when it comes to assets available to a person applying for ICP Medicaid. The applicant is deemed to own the assets in their trust. The trust assets and transfers from the trust are subject to the same 60 month “look back” provision as if they were owned individually. An irrevocable trust is different, but transfers to an irrevocable trust are in the “look back” period for Medicaid purposes. In an irrevocable trust, the Grantor loses all control over the trust and the trust is a stand alone entity. Most people do not set up irrevocable trusts without significant reasons. Revocable trusts can aid in estate administration, the probate process possibly being avoided, problems with blended family situations, and assist if a guardianship situation arises. It is a planning device that has many uses, but is commonly transparent when present in a Medicaid ICP application.

Florida has very strong laws concerning a resident’s homestead property. The Florida Constitution protects one’s homestead. Persons owning a home where they reside can set that homestead aside by noting on the MC application that they intend to return home when able. They do not abandon the homestead. The homestead property does not have to be liquidated to protect it. It can still be part of your estate plan. The lien for services provided under Medicaid does not attach to the homestead property when it goes to your heirs upon your death. Selling the home to pay privately is not necessary if it is a homestead property.

The term ‘spend down’ is familiar with many people especially those in other states. This means that the applicant for medicaid must ‘spend down’ to have non exempt assets of less than $2,000.00. Presently the state of Florida actually requires assets to be transferred to the community spouse or well spouse. In the situation of a blended family or single person there are other planning techniques that can successfully achieve this goal.