In Florida, can out of state vacation home be protected from nursing home

Tom Olsen: He and his wife, they're married. They live here in Florida. They got a vacation home in North Carolina. What would happen if they went into a nursing home in Florida? Robert, won't you answer that for them?

Attys. Robert Hidock: Okay. If they went to a nursing home in Florida, if it's purely a vacation home, it's accountable asset. Then we have to look at it do they want to rent it as one possibility, if they rent it, and there's not a mortgage on it, the property is safe. If it's income-producing property, it becomes excluded. However, the income may go to the nursing home, but the property remains intact, or they could put it up for sale. If it doesn't sell or whatever, the person still qualifies for Medicaid. If it does sell, there will be an asset issue but then we can do a personal services contract to disperse the funds and to keep that person on Medicaid. Tom, we've even done this. If they want to keep it in the family instead of doing a personal services contract with cash, they can do a personal services contract and transfer the property to a family member's name.

Tom Olsen: Those are all great options, Robert. Let's assume that they want to take the option that they want to rent it out. Can they deduct from their annual rental that they collect enough to pay taxes, maintenance, and insurance, and then only after that, whatever money would go towards their care?

Attys. Robert Hidock: Yes, it would be minus expenses. However, the big caveat to that is a mortgage is not part of that expense. For the IRS, it is, but for Medicaid, it is not. The good part if you're a married couple, and you both own that home together, the person that's going into the nursing home can divert that income to the wife at home. The wife will have all of the rental income, and none of it will have to go to pay the nursing home.

Tom Olsen: That's quite amazing. That's a great service that you offer, Robert, for people trying to get qualified for Medicaid here in the state of Florida. The fact that this vacation home is North Carolina doesn't make any difference. It's going to be governed by Florida law.

Attys. Robert Hidock: Yes, absolutely.

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