Senior America's Information Magazine



Financial planning for nursing homes


Do you plan to be in a nursing home?  Are you aware of the cost of a nursing home?  And how much money do you have saved for a nursing home, should you need to go there?  All questions that we should all answer.

Older Americans are in a crisis situation. Though we are living longer due to advances in medical technology, we are also surviving in situations where we are not able to care for ourselves. The family unit has also changed dramatically. 

Generally, our children do not live in close proximity to us and are not taking care of parents in their home. This has led to the creation of long term institutionalization among older Americans in nursing homes. And nursing home cost can be astronomical. The nursing home costs in South Florida average $5,000 per month.

One method to combat the cost of nursing home and/or in-home care is the purchase of long term care insurance. If we are healthy enough to afford the insurance and young enough to qualify, it can be an excellent investment. However, if we do not qualify and cannot afford the insurance, what alternatives exist?

The primary alternative is through the Medicaid program. In Florida, in order to be enrolled on Medicaid, the Institutional Care Program, three criteria must be met: (1) medical criteria; (2) income criteria; and (3) asset criteria.

The medical criteria will be met if an individual is determined to be medically needy by the Department of Health and Rehabilitative Services ("HRS") or is unable to do a majority of the activities of daily living. In addition, the individual must be residing in a Medicaid qualifying nursing home.

In order to satisfy the income criteria, an individual who is applying for Medicaid must have an income of less than $1,635 per month. This includes social security, pension, disability payments, interest, dividends and other income payments. If the individual has a spouse who is not currently living in a nursing home, said spouse's income is unrestricted. 

If the spouse is living in a nursing home, the spouse's income is also limited to $1,635 per month. However, is the applicant has income in excess of the limit, he or she may still qualify for Medicaid through the use of a Qualified Income Trust. This trust collects the income of the individual and permits the trustee to make the appropriate payments to the nursing home. This trust avoids Medicaid disqualification of individuals with income in excess of the income cap.

With regard to the asset criteria, a single individual living in a nursing home is only permitted to have $2,000 in assets. A married couple living in a nursing home is only permitted to have $3,000 in assets. 

If an individual is living in a nursing home and has a spouse living in the community (not living in a nursing home), the individual is permitted to own $2,000 in assets and the spouse living in the community is permitted to own $89,280 in assets. 

In addition to these asset limits, an individual may retain exempt assets such as a residence, one automobile, personal property and household furnishings and pre-need burial arrangements and burial plots. 

If an individual exceeds the asset limit as stated above, and subsequently transfers his or her assets to his or her spouse, there is no penalty. However, if the couple’s combined assets exceeds the asset limit stated above and one spouse transfers assets to a non-spouse, there is a thirty-six (36) month look-back period and period of ineligibility that may be incurred. 

If these transfers come from a trust to a non-spouse or if the transfers are to a trust, the look-back period is extended to sixty (60) months. The look-back period and ineligibility period may be shorter, depending on the amount of assets that have been transferred. 

The calculation to determine the period of ineligibility is the amount transferred to a non-spouse divided by $3,300. The solution to this equation equals the number of months of ineligibility for the Medicaid applicant. In addition, a transfer of an exempt asset to a non-spouse may also incur an ineligibility period.

We employ many different techniques in our office to preserve the assets of nursing home residents and potential nursing home residents within the Medicaid laws. 

Spending down one’s assets in order to qualify for Medicaid is one option but there are many more options that will allow one’s life savings and hard earned assets to go to their spouse and/or children and grandchildren and allow the ill party to qualify for Medicaid in one to three months.

The rules stated above are the general rules to qualify for Medicaid in Florida. There are many alternatives and planning opportunities to utilize to qualify for Medicaid. Before any action is taken, you should consult a qualified Elder Law Attorney who can explain the Medicaid program and alternatives for preserving your assets.

Stuart R. Morris is an Attorney and a Certified Public Accountant practicing is the areas of Elder Law, Nursing home planning, wills and trusts, estate administration, tax planning, international estate planning and asset protection. He is AV rated and board certified by The Florida Bar in both Elder Law and Wills, Trusts and Estates. He is also a Certified Elder Law Attorney through the National Foundation of Elder Law Attorneys. He is a member of the National Academy of Elder Law Attorneys and the Elder Law Section of the Florida Bar. Mr.. Morris has lectured extensively to attorneys, Certified Public Accountants and the public in the areas of Elder Law, nursing home planning, wills and trusts. Mr.. Morris has offices in Aventura, Boca Raton, Fort Lauderdale, Weston and West Palm Beach. You may reach him at 1-800-ELDER LAW (353-3752).

Copyright © 2002 Pitt Dickey - Used with permission


Disclaimer:  These pages are created to inform and educate the public only.  They are not and should not be considered legal opinions or advice.  You do not and cannot have any client-attorney relationship with SeniorMag or any of its employees.  You should not act upon legal advice found on SeniorMag and are advised to seek professional counsel before taking any action based upon information found on this site. 


Subscribe to the SeniorMag Newsletter

Our Sponsors

Find an attorney that is right for you

List your firm

Visit to find Meals on Wheels & Congregate Meal 
sites for seniors


© 2004






Assisted Living  | Home Care/Homecare  | Elder Law  | Canadian Pharmacy Directory
 · Advertising
Terms/Disclaimer | Email for technical support