Do I Need to Consider Retitling My Home or Other Assets?

Because Medicaid is based on need, the program has limits on how much value an applicant for the program and their spouse may have. A typical Medicaid applicant is allowed to have between $1,500 and $3,000 in their own name after they qualify for Medicaid. There is a higher limit that the applicant’s healthy spouse, called a community spouse, is allowed to keep for living expenses in the future.

Due to these low limits, many people consider retitling their assets in order to keep their assets below the limit that has been established by state and federal laws. While it is true that all assets, including those in the spouse’s name, are used to determine if an applicant qualifies, once the applicant has qualified, the assets of a spouse are treated differently based on the name claiming ownership of the asset.

Once an applicant has applied for Medicaid, they can then transfer some of their assets to their spouse without suffering a penalty. Transferring assets earlier than later can also help avoid problems in the future. An experienced estate planning attorney can help you determine whether you need to transfer assets and when the best time would be.

Issues Resulting from Incapacity 

One of the reasons that a Medicaid applicant may be applying for the program is due to a disability such as incapacity that may make them incapable of transferring the title of property to another person. If this happens, a transfer may only be made by an individual that has been authorized to make such transfers on behalf of the Medicaid applicant. This is typically assigned by a power of attorney or appointed by the court such as a guardian or conservator. Both of these situations may result in problems because some powers of attorney do not allow transfers to be made to the community spouse. Conservatorships and guardians are typically costly and time consuming and are best avoided if possible.

By transferring assets to the community spouse before the applicant is incapacitated, this will enable the spouse to make any future transfers that may be required or desired for Medicaid eligibility to be met.

Transferring a Home Title 

One of the most valuable assets that a person typically holds is their home, and most couples own their home jointly. When a home is owned in both spouses’ names, it is recommended that the couple considers transferring the title to the sole name of the community spouse. Although the home is rarely counted as an asset for Medicaid qualification, there are a few reasons you may want to consider transferring the title to one spouse’s name after the qualification process is complete.

• If the Medicaid applicant later becomes incapacitated, the sale or transfer of the home may be difficult.
• If a home is owned jointly with right of survivorship if the community spouse dies before the spouse using Medicaid, the house will be counted as an asset for the Medicaid recipient. This may result in the recipient having to sell the home if the recipient needs to continue residing in a nursing home. If the home is sold, the proceeds of the sale will go to Medicaid and disqualify the recipient from eligibility.
• If a home is transferred to the community spouse only, Medicaid will not be allowed to put a lien on the property in an attempt to recover payments they make on behalf of the recipient.
  

Contact an Estate Planning Attorney Today 

If you have questions about retitling your home or other assets, a Florida estate planning attorney can help. Attorney David Toback has years of experience helping his clients plan their estates and ensuring that their future is taken care of the way they plan. Contact him today to schedule a consultation.

Resource:

leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&URL=0700-0799/0744/0744.html