As a homeowner, protecting your house with your estate plan may entail more than merely sidestepping the probate process. That is, you may want to safeguard it from unexpected financial risks that may pop up during the rest of your lifetime. For one, your health may unfortunately take a turn for the worst and you may incur significant medical bills. Or, you may have to defend yourself in a personal liability claim that consists of hefty legal fees, and with a negative outcome, an expensive settlement amount, or a final judgment order. Given these very realistic hypotheticals, please continue reading to learn how to protect your house from nursing home costs, Medicaid, and other external expenses, and how an experienced Broward County estate lawyer from The Probate Lawyers can work to ensure this prized asset is passed directly to your beneficiaries as easily as possible.
For my beneficiaries’ sake, how can I protect my house from nursing home costs/Medicaid?
You may feel relief knowing that Florida law treats your primary residence differently than most other assets in the context of Medicaid eligibility, and that it will be considered an exempt asset while you are still alive. This is to say that you may not have to feel forced to sell your house during your lifetime to qualify for Medicaid long-term care benefits.
However, this does not necessarily mean that your house will continue to receive protection after your unfortunate passing. This is because Florida participates in the Medicaid Estate Recovery Program, which may authorize the state to seek reimbursement through your house and other assets within your estate.
With that in mind, you may consider handling the ownership transfer of your house while you are still alive. For example, you may deed your house to your beneficiary. Importantly, though, such actions must be taken more than five years before you apply for Medicaid, given the federal five-year “look-back” period that may cause your ineligibility.
Lastly, another notable strategy is an irrevocable Medicaid Asset Protection Trust (MAPT). Essentially, this removes your house as part of your countable assets. But again, the five-year look-back period applies. Also, with this trust type, you must understand its implication of surrendering your direct control over your house’s sale, refinancing, and more.
Is it possible to protect my house from my own issues with creditors or lawsuits?
As with all aspects of your estate plan, you may try to protect your beneficiaries from having to bear your personal financial issues upon your unfortunate passing. Specifically, say you are on the brink of bankruptcy, and your mortgage lender threatens to sue for unmet payments, or your contractors plan to place liens on your property for their unpaid labor.
Well, you should not make a fraudulent transfer of your house in an effort to evade your creditors. This may come with fraud charges and a slew of other serious legal issues. Rather, you may consider a sound estate planning strategy like setting up a tenancy by the entirety ownership if you are one part of a married couple.
There is no shame in asking for help, especially when you are dealing with something as serious as a legal matter that could affect your physical, emotional, and financial well-being. So please retain legal assistance from a skilled Broward County estate lawyer from The Probate Lawyers. We will happily lend a hand.
