Submitted by: The Law Offices of Hoyt & Bryan, Board Certified Elder Law Attorneys, One Senior Place Resident Business

H&B new picAs elder law attorneys, one of the most common questions we are asked by clients is whether Medicaid can take their Florida homestead property. The simple answer is “No, generally Medicaid cannot take your homestead property during life, or, with proper planning, upon death.” But, as is the case with most legal questions, the answer isn’t always so straight forward. This article is a more complete answer to the question at hand.

One of the reasons there seems to be a lot of confusion and misinformation regarding whether Medicaid can take homestead property is likely due to the fact that Medicaid rules vary from state to state. When applying for Medicaid benefits in Florida, the homestead is considered exempt and protected if: 1) a spouse or dependent/disabled child continues to reside in the home; or 2) the individual (or, on his or her behalf, a designated representative) states an “intent to return” home. The homestead will remain exempt during the lifetime of the applicant if the above criteria is met.

In addition, Florida has constitutional protection for homestead many states do not offer. In many states, creditors, including Medicaid, can force the sale of homestead property. This is not the case in Florida if the home is left to the surviving spouse or other family member. So, if you are discussing this issue with your brother in New Jersey there might be a different answer for New Jersey homestead but here in Florida, an individual can qualify for Medicaid while still owning his or her home.

So, what exactly is homestead? The Florida Constitution defines homestead as real property of no more than 1/2 of an acre of contiguous land in a municipality, or 160 acres outside a municipality, owned by a natural person, and the improvements on it. There is extensive case law about what exactly constitutes homestead, but that is beyond the scope of this article. For purposes of this article, homestead is the dwelling and attached land where you, or your family, reside. Rental properties and vacation homes are not typically considered homestead property. Further, in Florida, an individual can usually only have one homestead property. Homestead property is protected from Medicaid under Florida law, but additional properties are not.

It is important to keep in mind there are scenarios that may cause a Medicaid recipient to lose their homestead during their lifetime. Although the Medicaid rules allow retention of homestead as an asset, the Medicaid income rules can create practical challenges. Once approved for Medicaid, the bulk of the individual’s monthly income must be paid to the nursing home where the person is residing. Consequently, even though the homestead is not considered a countable asset, the real problem occurs if the applicant or applicant’s family can no longer afford to pay the taxes, insurance, and/or mortgage on the homestead property. If expenses on the home cannot be paid, Medicaid will not take the person’s home, but the inability to pay for upkeep and maintenance could force the sale of the home and, upon the sale of the home, the proceeds from the sale are not protected and may cause the loss of Medicaid eligibility if not timely planned for.

As you can see, the question of whether Medicaid can take your Florida homestead is not a simple answer of “Yes” or “No.” There are several factors that determine the correct answer. It is always prudent to consult with an elder law attorney regarding your specific situation in order to receive the most appropriate explanation. If you have questions concerning qualifying for Medicaid or any other elder law issue, please contact the Law Offices of Hoyt & Bryan at (407) 977-8080.