What happens to the parent's home when they go into a nursing home in Florida?

Attorney Tom Olsen: Robert, I'm going to go back to his scenario, and that is this, is that we're assisting a client, and mom's going into a nursing home and we're getting her qualified for Medicaid, and we know that mom is going to be allowed to keep her home. The question is that while mom is in a nursing home and this home that she has, it's sitting empty. The kids want to keep it so someday they'll inherit her home. This home, well, it's got a minimum. It's got insurance payments. It's got a real estate tax payment. It might even have a mortgage on it. Where are the kids going to get the cash to pay the caring costs of mom's home while she's in a nursing home?

Attorney Robert Hidock: Okay. This is a topic I talk about at great length in our workshops that we have because, like you said, not everybody's kids live near them or can take care of a home. When always, I'm talking to a client about asset protection, it comes down to even though there is an intent return home if realistically, your mom or dad isn't coming home, can you afford the upkeep of the house? If the answer is no, we can't, when I create the personal services contract, I include the future potential sale of the home. If they can't upkeep it and there wasn't enough assets available to pass in a personal service contract initially to pay for that upkeep of the home, I can create a contract that will actually cover the sale of that home, either before the Medicaid application or after the Medicaid application, and it will go to the recipient of the service contracts.

Tom: I got it. I guess what I was heading at is, is there an opportunity for the kids to rent out mom's home and use that rent money to pay taxes, maintenance, insurance including mortgage payments?

Robert: Potentially, yes. They can rent the house out. They do have expenses that are allowable. However, whatever income is left, it's income to the person who's in the nursing home. That may or may not put them over an income limit to get them into. They might need a qualified income trust, but the kicker, Medicaid, will allow all the expenses except a mortgage. They will not allow rental if the house isn't paid for. If there's a mortgage on the house, Medicaid won't allow for that mortgage payment to be made.

Tom: Okay. You're telling me something I've never knew before, so thank you for that. Then the kids may have to pull their own money out of their pocket to keep that mortgage paid. Of course, they're doing that because, hopefully, mom's got a lot of equity in it at home, and someday, when she passes away, that equity is going to pass on to the kids.

Robert: Yes.

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