You may be putting back quite the inheritance for your children, but even a brief time in a nursing home facility could eat all your savings quickly. The Florida Health Care Association reports on 2020 data indicate that you are likely to pay more than $100,000 to have a room to yourself in a Florida nursing home.
Maybe you will not have to live in a nursing home, but the numbers suggest that it is likely. The state’s facilities house an estimated 71,000 residents at any given time. Here is a possible contingency plan you may be able to fall back on.
Medicaid pays for the costs of nursing home care for over half of all residents. However, Medicaid is the program that covers health care expenses for people whose income and assets fall below a certain threshold. While your income and assets likely exceed that amount — which changes from year to year — you may be able to meet the guidelines with a carefully designed plan.
You cannot simply give your children the excess income and then apply for Medicaid due to a five-year lookback period from the time you apply. Your strategy must be in place before this point. Gifts and irrevocable trusts are two common estate planning tactics. However, if you give your children gifts over time, you probably want to spread these out to minimize the federal gift tax.
There is some spending that will not violate the lookback period. This includes paying off debts and adapting your home for accessibility with features such as ramps, lowered cabinets and rails.
Even if it is too late for you to plan ahead, and it is time to take action now, there may be exemptions or other opportunities, depending on your unique circumstances.