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Dear Mr. Feichthaler:
My mother lives in Cape Coral, with the house fully paid for. I am her only child, and she wants me to inherit the property if she dies. There is the possibility she will need long-term care, but she doesn't want the value of the home reimbursing the government. What can we do to protect this main asset?
– Gary R.
Dear Gary,
This is an issue that many of my clients face. First, there can be a discussion whether seeking to be considered "low-income," and the potential level of care received as a result. My clients generally take the position that they would like to seek the best care possible, which may mean utilizing the value of their home which they earned. A few clients do wish to be eligible for Medicaid, regardless of level of care, to protect the value of the home for their beneficiaries.
In Florida, Medicaid does not include the value of the home in most Medicaid calculations. Although the state has the ability to claw back monies spent for long-term care from participants in the program, it cannot do so unless there is an estate to obtain the funds from. That is why, for my clients, regardless of their goals for their beneficiaries and management of assets, a plan to avoid a probate estate is vital. I have previously discussed the substantial cost savings and elimination of stress by avoiding probate through planning, but it also produces an extra benefit: With no probate estate, there should be no claw back of benefits.
So, your mother should consider either an Enhanced Life Estate Deed or the formation of a revocable trust with Deed to Trustee. Both of these methods will avoid probate of the home. It is important to plan for other financial assets as well. It is highly recommended to consult with an attorney experienced in both estate planning and real estate so that your goals can be attained without potential negative consequences.
Eric P. Feichthaler has lived in Cape Coral for over 35 years and graduated from Mariner High School in Cape Coral. After completing law school at Georgetown University in Washington, D.C., he returned to Southwest Florida to practice law and raise a family. He served as mayor of Cape Coral from 2005-2008, and continues his service to the community through the Cape Coral Caring Center, Cape Coral Museum of History, and Cape Coral Kiwanis. He has been married to his wife, Mary, for over 20 years, and they have four children together. He earned his board certification in Real Estate Law from the Florida Bar. He is AV Preeminent rated by Martindale-Hubbell for professional ethics and legal ability, and is a Supreme Court Certified Circuit Civil Mediator. He can be reached at eric@capecoralattorney.com, or 239-542-4733.
This article is general in nature and not intended as legal advice to anyone. Individuals should seek legal counsel before acting on any matter of legal rights and obligations.