In Florida, the primary residence is often protected by the Florida constitutional homestead protections.
While in many other states, a persons homestead is not protected from creditors and can be lost to claims for Medicaid reimbursement, this is not the case in Florida. The only creditors that can make a claim against the home are those that do something with the home. These may include a roofer or the bank which financed the home.
If you or a spouse needs nursing home case, selling the home can place that asset or the money received from the sale at risk to creditors as well as Medicaid eligibility. There are several methods of avoiding probate on your homestead. Choosing the right method is not an easy decision without knowing your facts and circumstances.
Many people make the mistake of adding another individual through a deed. This mistake can cause tax problems, subject the home to creditors, cause the loss of part or all of the homestead tax credits, and create an ineligibility period for Medicaid.
Every person who owns and resides on real property in Florida on January 1 and makes the property his or her permanent residence is eligible to receive a homestead exemption up to $50,000. The first $25,000 applies to all property taxes, including school district taxes. The additional exemption up to $25,000, applies to the assessed value between $50,000 and $75,000 and only to non-school taxesIn some situations, a ladybird deed or enhanced life estate deed may be a valid solution while in others a trust may offer a less expensive route and offer better protection for the beneficiaries.
To apply for a homestead tax exemption, complete this Form.
An improper transfer or change in ownership can have many adverse effects including violating the 5 year Lookback for transfers on Medicaid.
To find out which option makes the most sense for your family, you should contact a Florida estate planning lawyer who is familiar with elder law issues and discuss your circumstances in detail.