Florida Estate Planning Lawyer Blog

The eligibility requirements for Medicaid have changed for Florida as of 1/1/2012. There were changed in the income criteria, maximum amount of assets, and maximum equity in your homestead property.

Florida Medicaid Income Limits as of 1/1/2012.

The Applicant's income limits have increased from $2022/ month to $2094/month. If the applicane for Medicaid has income in excessof $2094, they may use a Qualified Income Trust or Miller Trust to help the appllicant qualify for Florida Medicaid Benefits under the Medicaid Asset Test.

Florida Medicaid Asset Limits as of 1/1/2012.

For an individual who is not married, the Applicant can only have $2000 in countable assets. This number is unchanged from 2011.

For an Applicant who is married, their Spouse's Asset limits have increased from $109,560 in 2011 to $113,640 as of 1/1/2012.

If you have more than the maximum assets, we can talk about how to convert countable assets to exempt assets, spend the money appropriately or plan for gifting, loans, or Medicaid compliant Annunites to allow you to qualify even if you have signifiantly more assets than the maximum.

Florida Medicaid Homestead Equity Limits as of 1/1/2012.

An Applicant for Florida Medicaid can have $525K in homestead equity. This value has increased from the $506K which was allowable in 2011. If your home has more than the maximum value of equity, there are ways to reduce the amount of equity to allow you to qualify for Florida Medicaid.

if you or a family memeber will be looking for Florida Medicaid Benefits, you should consult with a Florida Medicaid Lawyer before you apply for coverage to protect excess income or assets and allow you to qualify properly. Many of these techniques can still be used even if the family member is already in a nursing home.

As you or your family members age, it is important to review your Florida Estate Planning Documents with somone who is familiar with Elder law and estate planning because many of the techiniques used for estate planning can cause problems when applying for Florida Medicaid Benefits

DCF will reject Medicaid planning involving trusts and personal service contracts where a power of attorney is executed after 10/1/11 and the DPOA does not specifically authorize the ability to execute trusts or personal services contracts.

If you are using forms for a POA or DPOA, you should have them reviewed by an attorney as the may not be valid with the recent law change. In addition, the forms may not let you accomplish what needs to be done in regards to planning for a nursing home or Medicaid eligibility.

Currently the Revocable Living Trust is the most popular type of trust for estate planning. With the current estate tax exemption at 5 Million dollars, many have begun to ask if there is a need for such a trust. More over the Revocable Living Trust provides no asset protection.

Currently 99.7% of the US population has less than 5 Million in Assets. While a Revocable Living Trust can offer privacy, probate avoidance, easier management of one's assets, and numberous other benefits, it does not offer any asset protection. Many people really want an irrevocable trust, but do not want the consequences of the traditional irrevocable trust. While there are many types of irrevocable trusts, most either cause a loss of control over the assets by the grantor, loose the stepped up basis, or cause the trust to pay taxes at the highest tax rate with as little as $11,000 in earnings.

There are variations of the irrevocable trust that can solve one or more of these issues, but there is only one type of Irrevocable Trust that has the flexibility of a revocable trust, provides asset protection from the creditors of the creators as well as the beneficiaries, allows the income to be taxed at personal rates, and provides for stepped up basis upon the death of the creator.

While the IPUG: Irrevocable Pure Grantor Trust defies the logic of most estate planners, it has been designed using common law, trust law, and tax law to provide Asset Protection, taxing at a personal level, the ability to control the income and principal, stepped up basis and even can even help in nursing home qualification or Medicaid eligibility.

If you would like to find out how you can upgrade your standard revocable trust or create a new Florida Asset Protection Trust, contact a Florida Estate Planning Lawyer that is knowledgeable about the Irrevocable Pure Grantor Trust and how to structure it to accomplish your goals.

While most people feel they have to be super rich to use Asset Protection trusts an IPUG™ Trust is a Self-Settled Asset Protection Trust for that makes sense for regular people and offers Medicaid compliance that works in all states. It protects client assets from creditors, predators and nursing homes, while permitting the grantor to be trustee and have customized access.

The iPug™ Trust was created by utilizing universal, fundamental trust and common law principles dating back to the statute of uses and are not reliant or dependent upon state or federal specific asset protection laws. "In essence, the iPug™ Trust is an Irrevocable Grantor Trust for income and estate tax purposes.

Why is this important to most Americans? The IPUG™ Trust not only provides advantageous tax benefits but it also provides asset protection. Most Irrevocable trusts do not provide the beneficaries with a full step-up in basis and allow the grantor to control the funds.

With the increase in the estate tax exemption to $5 million the iPug™ will be usable by more than 99.5% of Americans.

If you are a married person in the State of Florida and have not created a Florida Will or Florida Revocable Trust you should fully understand what will happen to your assets when you die.

Previously in Florida, if a husband or wife passed away with only children belonging to the surviving spouse, the surviving spouse would receive the first $60,000 of the decedents probate estate, while the rest was split equally between the surviving spouse and the children or their heirs.

Governor Scott signed the Florida Law on June 21st. The new Florida Law gives everything to the surveying spouse (where one has passed away without a will and is survived only by a spouse and children of that marriage).

The reasoning for this rests behind the thought that the surviving spouse will "take care" of his or her own natural children and so there is no need to split anything beyond $60,000.

The new law does not change what happens when the decedent had children from outside the marriage. If someone with a mixed family dies without a Florida Will, 50% of the estate goes to the surviving spouse with the other 50% automatically divided among the decedent's children or a deceased child's descendants.

On a positive note, married couples typically want their surviving spouse to receive 100% of the deceased's estate. However, if you would like to have a say in how your estate is divested, some action is necessary on your part.

One major concern with this is that as we age, the old law provided a mechanism to give assets to the kids without subjecting them to claims of nursing homes and medicaid eligibility of the surviving spouse. Now if you die without a will and your surviving spouse needs nursing home coverage, it may be more difficult to qualify given that there is a $2000 cap on the amount of assets a single person can have in Florida.

To Discuss your situation or speak with someone about your options Contact A Jacksonville Estate Planning Attorney by email or call anEstate Planning Lawyer in Jacksonville at 904-685-1200 to schedule a free consultation to discuss your options in dividing your estate the way you see fit.

Suppose your parents set up a tax planning Florida Revocable Trust with the assets being held for the kids in trust. Under the terms of the trust, the trustee is to distribute net income and principle as the trustee determines is necessary for education and support in reasonable comfort. If one of the kids is on Medicaid, many states will determine that they are ineligible for Medicaid because of the availability of funds, even if the trustee does not distribute them. It is important to create trusts with the proper language to deal with special needs and not make them ineligible for Medicaid. If you would like to review your situation or have a child with special needs you should contact a Florida Estate Planning Lawyer to discuss your situation and goals.

Most people who receive payments for Social Security, Social Security Disability Insurance (SSDI), Supplemental Security Income (SSI), or a Railroad Retirement or Veterans Administration disability pension, will receive $250 as part of the American Recovery and Reinvestment Act of 2009. The extra payment is scheduled to arrive by the end of May.

Those who live in a nursing home and receive SSI are not eligible for the payment.

Medicaid-eligible long-term care facility residents and their families should know that the stimulus payment is not considered income and will not be counted as a resource for 10 months (including the month of receipt) in calculating benefits under Medicaid (or any other federal program or state program with some federal financing). The $250 will also not count as gross income for tax purposes. Recipients can save the payment if they want to, but they should make sure that it will not put their savings over the asset limit for any program benefits they may receive as of February 2010.

Medicaid-eligible long-term care facility residents and their families should know that the stimulus payment is not considered income and will not be counted as a resource for 10 months (including the month of receipt) in calculating benefits under Medicaid (or any other federal program or state program with some federal financing). The $250 will also not count as gross income for tax purposes. Recipients can save the payment if they want to, but they should make sure that it will not put their savings over the asset limit for any program benefits they may receive as of February 2010.

Because the $250 payment will not be counted as income, it will not put a Medicaid-eligible resident over the state's income limit. In addition, a Medicaid nursing facility resident should not see an increase in his or her patient pay for the month the payment is received.

One very useful Medicaid planning technique involves the creation of an irrevocable Medicaid Asset Protection Trust. With a Medicaid Asset Protection Trust a person or couple can transfer some of their property to the trust to hold and manage for their benefit during their live with the remainder paid to their family after their death.

Example: David and Beth have assets in their savings and stock accounts of $250,000. They currently live off income from their investments, social security, and other retirement benefits. They are concerned that if they need nursing home care they will not have enough money to support their lifestyle and pay for the medical expenses for the remainder of their life.

Solution: David and Beth decide to transfer $150,000 to a Medicaid Asset Protection Trust. The trust provides that all income is paid to them while alive and in the event one needs nursing home coverage under Medicaid the income is paid to the other. Upon the death of the surviving spouse, the trust will terminate and distribute the remainder to their children. By using this type of irrevocable trust their assets are protected and they receive an income stream for their lives.

Potential Problems: The gift to the Medicaid Asset Protection Trust can cause a period of ineligibility for Medicaid benefits. The length of the ineligibility period depends upon 1) the value of the assets given away and 2) The date the assets were given away. After the ineligibility period, the assets in the Medicaid Asset Protection Trust should be protected and not counted as a disqualifying asset for Medicaid planning purposes. In addition, this removes the assets from the reach of the spouses.

A Medicaid Asset Protection Trust is not for everyone, but it can be a means of protecting a family's financial security. These trusts can be complicated and must be tailored to the families resources and needs. It is important that you use a Florida Elder law attorney who is familiar with the Florida Medicaid laws and who has experience in creating this type of trust.

Please note: The Irrevocable Medicaid Asset Protection Trust is not the same as a "revocable trust", "revocable living trust" or "living trust" that is currently being sold through Trust Seminars.

Contact us by email or at (904) 685-1200 for more information.

What happens if Grandpa needs to Nursing home coverage and he owns a Class3 weapon like a Machine Gun?

Class 3 weapons or those controlled by the National Firearms Act are not exempt assets when it comes to Medicaid Planning.

There are ways to preserve these assets for your family but it involves converting the asset from an exempt asset to a non-exempt asset. On my other blog, Gun Trust Lawyer I wrote a Gun Trust Information article addressing this issue.

If you or your family has a person who needs nursing home coverage and they have war relics which may include a Machine Gun you should Contact a Florida Estate Planning Lawyer to discuss your situation.

In Florida, the Life tenant is generally responsible for the costs of repairs, but the remaindermen are responsible for the payments for improvements to the property.

If the life tenant paid for the costs of improvements on a property, this would constitute an uncompensated transfer or gift which could result in a period of ineligibility for Medicaid.

If repairs are being done on the property, it is important to have he contractor and suppliers specify that everything is begin done as a repair to avoid the possibility of the DCF worker classifying it as an improvement and creating a gift.

Before making repairs on a life estate, you should make sure that the act will not disqualify your family member from coverage. Please Contact a Florida Elder Law Lawyer to discuss your situation and Florida Medicaid Planning.

The Medicaid Asset Test

If you qualify under the income test or can create a Qualified Income Trust (QIT) you must still pass the Medicaid asset test. This test can be the most daunting and confusing. First, you must know the asset test limits. These vary between single and married individuals. The reason for this is so that a survivor of a Medicaid recipient is not left destitute by the spend down (more on this in a moment). The asset test level for an individual is $2,000 in countable assets and $104,000 (2008) in countable assets for a community spouse who not in a nursing home facility. For married couples, both persons must qualify under the asset test.

Second, you must understand the difference between exempt (countable) and non-exempt assets (non-countable). Exempt assets do not count towards the asset test limits and non-exempt assets do count towards the asset test limits. The following are exempt assets:

* Homestead of any value (with some limitations)
* First Car of any value
* Second car if >7 years old but <25 years old. (Cannot be a luxury car)
* Life Insurance up to $2500 or cash value of Life insurance if in face value is in excess of $2,500
* Burial Plots for you and your spouse and others in your name ($2,500 each)
* Household and personal belongings
* Irrevocable Burial Contracts
* The principal in certain annuities and IRAs or other qualified plans

There are some other non-countable assets but for the most part this is it. What this means is that checking and savings accounts, stocks, bonds, mutual funds, IRAs, 401(k)s, 403(b)s and trust assets are all counted towards the asset test. In short, any asset that is not exempt and can be turned into cash is counted. Please see the Florida Administrative Code Section 65A-1.712 (SSI ¬Related Medicaid Resource Eligibility Criteria) for a more technical analysis.

What happens if you (and your spouse's assets) are over the asset test limits? You will have to "spend down" until you qualify. In other words, you will have to spend your own assets on you or your spouse's nursing home care until such time as they are below the asset test limits and you can qualify. Some call this the "Pre-Death Tax".

However, there still are some things that you can do. Just as the income test had planning alternatives, so does the asset test. But first you need to know some other rules concerning the asset test.

If you are a concerned relative or friend of an elderly person and need help with Estate Planning, Elder Law, or Medicaid and are in the Jacksonville, Orange Park, St. Augustine, Fernandina Beach, you should Contact a Florida Estate Planning Lawyer or Jacksonville Elder Law Lawyer.

Many individuals have long term care insurance to help with nursing home and assisted living costs. Generally long term care insurance is considered a good investment when individuals are healthy can afford the premiums. Rarely does having long term care insurance lead to a negative result.

Things might have changed in Florida with outcome of a recent caseRosenshein v. Florida Department of Children (Fla. Ct. App., 3rd Dist., No. 3D07-989, Oct. 24, 2007). The Appeals court agreed with the state's determination that payments received from a long-term care insurance policy are income. This income can create an ineligibility for Medicaid benefits.

What does this mean for your current long-term care policy? Should you abandon long term care insurance to help pay for nursing home costs? I don't think so. You do need to evaluate the way in which your policy is written and how benefits are paid to avoid this type of outcome. If you would like your long-term care policy reviewed you should Contact a Florida Estate Planning Lawyer to review your policy in light of the outcome of Rosenshein v. Florida Department of Children.

This topic was covered by SeniorLaw Link on December 17, 2007 in an article by Richard Shea, a CT Estate Planning and Elder Law Attorney

There have been many changes in the eligibility requirements for Medicaid. One of the most significant is that penalty periods and ineligibility periods begin from the date of application. It is for this reason, that you should have your documents reviewed by a Jacksonville Florida Elder Law Lawyer who works with Medicaid applications. As many posts of this blog have stated, the rules, and laws changed significantly in 2007. It is for this reason, you should not rely on books in print, friends, or family. It is highly unlikely that they have the experience necessary and have dealt with the new policies an procedures.

Michael Keenan of the Connecticut Elder Law Blog has begun a series which discusses How to Get Organized Before Filing Your Medicaid Application. I would suggest reading it and even if you are not a technically oriented person, make a copy and show it to your family or Florida Elder Law Attorney. Perhaps they can scan or help organize the documents for you.

As a Florida medicaid Planning Lawyer, clients often ask about coverage, eligibility, and benefits in other states. I ran across an article entitled A Ranking of State Medicaid Programs on the Public Citizen website.

Here is a link to the overall ranking of states by Score Florida Ranks 26th If you would prefer this is a ranking by state name.Use this link for some details on Florida . You might be surprised to know that Florida ranks 4th on Quality of care.

As a Florida Estate Planning Attorney, I often get involved in planning for Disabled Florida Adults and Children. Often these individuals are receiving government benefits or expect to receive the in the future due to a physical or mental illness or disability. In some cases clients expect their spouse to need these benefits soon. If the individual receives income that is to create or acquires or maintains assets above a certain level, they will be unable to qualify for these government benefits.

Often the solution is to create a Florida Special or Supplemental Needs Trust. This trust can hold assets and income that would typically disqualify an individual. This money can then be used to supplement their lifestyle. The Connecticut Estate Planning Blog has a two part article on this topic and the rules there seem to be very similar to those in Florida. If you have someone in your family who is currently disabled, or you expect to need government benefits in the future, you should discuss this with a Florida Estate Planning Lawyer so that you can determine what the best option for your particular situation is.