Medicaid eligibility is a key concern for numerous seniors in Florida. There are many potential strategies to improve eligibility, and a popular option involves “spending down.” Although you might have heard a little about spend-down strategies, you might want to discuss them further with an experienced lawyer. Online research only gets you so far, and it is important to choose a strategy that matches your exact goals. That said, spend-down strategies could be effective for a wide range of individuals. Discuss this possibility further with a Medicaid lawyer in Florida.

Why Are Spend-Down Strategies Necessary?

Before you get into the specifics of spend-down strategies, it is important to consider why they are necessary in the first place. First, consider the eligibility rules of Medicaid in Florida. As a “needs-based” program, Medicaid is available to those with relatively few assets and low incomes. 

In Florida, the asset limit for a single person applying for Medicaid is $2,000. For couples, this asset limit is slightly higher – at $3,000. 

That being said, certain assets are exempt from Medicaid asset calculations. These include your homestead (your personal residence), one vehicle, and personal property/furnishings within your home. That said, your personal property in your home cannot exceed $20,000. 

Finally, you are allowed to set aside some funds for your burial/funeral and your retirement. Some retirement plans, including 401(k)s and IRAs, are exempt from Medicaid eligibility calculations in Florida. 

Put aside all of these exempt assets and add up the remaining assets in your estate. Are these assets worth more than $2,000? If so, you might need to consider Medicaid spend-down strategies in Florida. 

There is No Need to Throw Away Your Hard-Earned Cash

If you have considerable non-exempt assets, there is no need to simply throw them away in order to qualify for Medicaid. Instead, you can strategically spend this money to improve your financial well-being. The most obvious course of action is to pay off any debts you might have. 

This includes mortgage debt, since transferring non-exempt assets to your homestead does not reduce your net worth. In fact, paying off the interest on your mortgage can lead to considerable financial security in later life. You can also aggressively pay off any other debts you might have, including credit card debts. Finally, you might consider paying off any outstanding medical debts you have. 

Transferring Money Into Your Exempt Assets

It makes sense to transfer money into your exempt assets if possible. If you haven’t already created a funeral plan, you can go ahead and create one to “spend down” your exempt assets. A funeral plan worth up to $2,500 is exempt from Medicaid eligibility calculations in Florida. You might also want to transfer excess assets into a retirement fund, such as an IRA or 401(k). 

You might assume that selling your old home and upgrading represents a potential spend-down strategy. The general idea is to sell your home and put the proceeds toward a new home. Combine that down payment with your excess cash, and you effectively funnel your non-exempt wealth into your primary residence. The end result? A higher standard of living, a better home, and Medicaid eligibility. 

However, these strategies are not quite so straightforward. First of all, you need to make this transaction at least five years before you apply for Medicaid. If you are planning on applying for Medicaid within the next couple of years, it is probably too late to attempt this strategy. You also need to consider the specific rules and conditions regarding the property and its use. Consider discussing your options with a Medicaid lawyer at Elderly Care Law Firm before you attempt a complicated real estate spend-down strategy. 

A more appropriate strategy might be to pour excess funds into renovating your existing home. Instead of purchasing a new home, you can improve your residence to a considerable extent. Because you are pouring those assets into your homestead, you do not have to worry about exceeding Medicaid asset limits. 

And as a bonus, you can make your residence more comfortable and safe as you age in place. Many renovations may be appropriate for seniors approaching retirement age. Examples include stairlifts, improved air conditioning, smart home technology, high-grip surfaces, bathroom handles, and much more. Speak with an elder law attorney to learn about renovations that can help you qualify for Medicaid and age in place. 

Advanced Spend-Down Strategies With Trusts

Trusts offer exceptional flexibility and control, and you can establish a trust as part of your spend-down strategy. One option is a Medicaid Protection Trust. As its name implies, this type of trust is specifically geared toward protecting your non-exempt assets from Medicaid eligibility issues. According to courts and Medicaid officials, a trust represents a separate legal entity, and trust assets are not part of your personal estate. That said, certain trusts may fail to help with spend-down strategies. Discuss options like Miller Trusts with an elder law attorney in Florida. 

You Also Need to Consider Your Income

Note that your assets only represent part of the equation when it comes to Medicaid eligibility. You also need to consider your income, and Florida has strict rules on this subject. The income limit for Medicaid applicants in Florida is about $3,000 a month or almost $6,000 for couples. Note that these numbers change constantly based on inflation, so you should check with a lawyer to determine the exact limits. 

Can a Medicaid Lawyer in Florida Help Me?

A Medicaid lawyer in Florida can help seniors with many eligibility-related issues. If you are not yet eligible for Medicaid, a few simple strategies could ensure you get the treatment you need and deserve. Spend-down strategies are popular, and they represent a perfectly valid course of action for many seniors. That said, it is best to discuss your various options with a lawyer before choosing a specific strategy. Compared to online research, advice from a lawyer can be more personalized and accurate. Expand upon this discussion by contacting The Elderly Care Law Firm today.