Florida Bar Federal Court – U.S., District Court for the Middle District of Florida

Stetson University College of Law – cum laude Virginia Polytechnic Institute – cum laude

Mr. Zoecklein and Zoecklein Law are currently litigating cases in the following practice areas: Personal Injury Mortgage Foreclosure Property Damage Elder Law Consumer Law Probate Family Law Business Law

Email: Brice@zoeckleinlawpa.com Tampa Office: (813) 993-4967 Lakeland Office: (863) 808-0530 Sarasota: (941) 313-3330

Medicaid Planning - Zoecklein Law, P.A.

Medicaid Planning

What is Florida Medicaid?

Medicaid is a public assistance program in the United States that provides health coverage to eligible low income elderly adults and people with disabilities. It is a jointly funded program for Floridians paid in part by the State of Florida and in Part by the Federal Government. In Florida the program is administered by the Agency of Health Care Administration (AHCA). Those that qualify for Medicaid receive payments for a wide range of health services like hospital care, doctor visits, prescriptions and long term care.

Medicaid versus Medicare

It’s crucial not to confuse Medicaid with Medicare. While their names are similar, they are distinctly different programs. Medicare is a federally funded health insurance program primarily for people over 65 or those under 65 with disabilities, provided they have paid into the system. In contrast, Medicaid is a need-based program designed to assist disabled persons who cannot afford their own care, offering both medical care and long-term skilled nursing care in facilities like Skilled Nursing Facilities (SNFs). Eligibility for Medicaid requires demonstrating both financial need and medical necessity/disability, and it is jointly funded by the state and federal governments. Only Medicaid will pay for long term care costs.

Why do I need to Plan for Medicaid ?

To put simply the high costs of long-term care. According to the Florida Health Care Association the median cost of an annual private room in a nursing center is $100,375 or $8,364 per month! A common misconception is that you need Medicaid planning only if you are low income. Many of our Clients are high to middle income earners who realize quickly that the cost of long-term care, if not planned for ahead of time, will completely wipe out their savings.

How do I Qualify for Medicaid?

RESIDENCY STATUS: In order to qualify for Medicaid in Florida you must be a resident of Florida and be a US Citizen or Legal Resident Alien.
INCOME STATUS: There is an income test which gets periodically revised. As of January 2024 the earnings must be less than $2,829.00 per month. For the community spouse, or the spouse of a Medicaid applicant, there is no upper limit on their gross monthly income. However, if the community spouse’s gross monthly income falls below $2,465.00 (as of July 1, 2023), they may be entitled to receive a portion of the applicant’s income. This financial support is referred to as the Minimum Monthly Maintenance Needs Allowance (MMMNA). Under specific conditions, this allowance can be adjusted to raise the community spouse’s income above the standard Monthly Maintenance Needs Allowance, ensuring their financial needs are met.
ASSET TEST: There is also an asset test, the qualifying recipient must not have more than a certain threshold of assets ($2,000 in 2024). The Medicaid applicant is limited to owning no more than $2,000.00 in countable assets, not including exempt and non-countable assets. The community spouse, or the well spouse of a Medicaid applicant, is allowed to retain up to $154,140 in assets (effective as of January 1, 2024). This total includes exempt, non-available, and income-producing assets.When applying for Medicaid, assets are categorized to determine eligibility, particularly for long-term care. Here’s how these assets are classified:

Countable Assets: These include any resources that Medicaid regards as available to the applicant and their spouse. They play a critical role in assessing eligibility, as exceeding the allowable limits can result in disqualification for Medicaid benefits.

Non-Available Assets: Some assets are out of reach for the applicant or their community spouse, either because they cannot be easily liquidated or are inaccessible. For instance, income-producing properties like rental buildings might generate revenue but aren’t quickly convertible to cash. Notably, these assets can be subject to a Medicaid recovery lien after the death of the beneficiary if they are in the deceased’s name or go through probate.

Exempt Assets: Certain assets are exempt from consideration when determining Medicaid eligibility:

Homestead: A primary residence is exempt, though eligibility is capped for applicants with home equity exceeding $713,000 as of January 1, 2024. This threshold applies to long-term care benefits but might not affect eligibility for other types of Medicaid services.

Motor Vehicles: One vehicle is always exempt from Medicaid’s asset test. A second vehicle may also be exempt if it is over seven years old, barring luxury, antique, or customized vehicles (unless modified for a physical disability).

Life Insurance: Policies owned by the applicant or their spouse are exempt if the total face value does not exceed $2,500. Term life insurance policies are always exempt.

Burial Plans: Both the applicant and their spouse may exempt burial plans up to $2,500, or any value if the plan is irrevocable.

Retirement Accounts (IRAs, 401ks, 403bs): These accounts are unique in Medicaid’s eyes. If withdrawals are made regularly and based on life expectancy tables provided by the Social Security Administration, they are treated as income. If not, they are considered as assets.

Medicaid’s policies on home equity are waived under certain circumstances, such as when the applicant’s spouse, a minor child, or a disabled child of any age resides in the home. This exemption ensures that long-term care eligibility does not force applicants to sell their homes, thereby preventing undue hardship.

Navigating the nuances of Medicaid’s asset rules is essential for applicants, especially those seeking long-term care benefits. Understanding these classifications helps applicants prepare for the process and safeguard their eligibility.

Strategies for Medicaid Planning

1. MEDICAID ASSET PROTECTION TRUST
  If your assets exceed the threshold for qualification into Medicaid sometimes a viable strategy is to create and fund an irrevocable Medicaid Asset Protection Trust (MAPT). These trusts are funded with your assets and designate a Trustee to manage the assets. The person needs to be someone other than your spouse. The assets in the Trust are invested and you can receive all the income that the trust generates. You or your spouse cannot draw the principal but the Trust and Trustee may be directed to make distributions to others who may in turn provide you the resources you need. Your Trust agreement can set forth how the assets are to be managed during your lifetime and allocate them after your death to your beneficiaries. These types of Trusts are best for liquid or money assets and are used to reduce the asset threshold.
2. QUALIFIED INCOME TRUSTS AKA MILLER TRUSTS
  A Miller Trust, or Qualified Income Trust (QIT), offers several key advantages for individuals who need Medicaid to cover long-term care costs but have incomes that exceed the allowable limits for Medicaid eligibility. The primary advantage of a Miller Trust is that it enables an individual to qualify for Medicaid despite having a monthly income that exceeds the state’s Medicaid income threshold. By redirecting excess income into the trust, the individual’s income is effectively reduced to a level that meets Medicaid’s eligibility criteria.
  Income placed into a Miller Trust can be used to cover the individual’s share of cost for Medicaid services, which may include monthly nursing home expenses or other types of long-term care. This arrangement ensures that the individual can afford necessary care without spending down all their resources. In situations where one spouse needs Medicaid and the other does not, a Miller Trust can be used to allocate a portion of the Medicaid recipient’s income to the non-applicant spouse. This can help maintain the non-applicant spouse’s standard of living by providing a minimum monthly maintenance needs allowance, ensuring that the spouse who remains in the community is financially supported.
  While the funds in a Miller Trust are primarily used to pay for Medicaid-covered expenses, they can also be allocated for other specific uses, such as paying the personal needs allowance for the Medicaid recipient, covering health insurance premiums (like Medicare), and occasionally other approved medical expenses not covered by Medicaid. The remaining funds in a Miller Trust are typically used to reimburse the state for Medicaid expenses after the beneficiary’s death.
3. SPENDING DOWN ASSETS
  Sometimes our Clients qualify for Medicaid by spending down assets on non-countable items to qualify for Medicaid. Examples include paying for medical expenses, prepaying funeral expenses and making home improvements to accommodate disabilities.

Medicaid in an ALF Facility
Medicaid does not pay room and board at ALF but will pay for everything in a nursing home. The medical care provided at an ALF can be covered. And that can significantly reduce the overall cost of the ALF.

CALL US FOR A FREE CONSULTATION TO OBTAIN MEDICAID BENEFITS 813-501-5071

Useful Links:

Applying for Assistance | Florida DCF (myflfamilies.com)

Medicaid | Florida Agency for Health Care Administration (myflorida.com)

Fla. Stat. 736.0406: If the creation, amendment, or restatement of a trust is procured by fraud, duress, mistake, or undue influence, the trust or any part so procured is void. The remainder of the trust not procured by such means is valid if the remainder is not invalid for other reasons. If the revocation of a trust, or any part thereof, is procured by fraud, duress, mistake, or undue influence, such revocation is void.

So in Florida, if either the trust or the revocation of a trust was procured by (1) fraud (2) duress (3) mistake or (4) undue influence it will be rendered invalid. Actions to terminate a trust are independent actions and typically do not have to be brought before the relevant Florida Probate Court or in the Probate proceeding.

The causes for revocation of a trust in Florida are very similar to the revocation of a will in Florida. In addition to the enumerated reasons in the statute, ample authority exists to overturn a trust agreement if the testator lacked the mental capacity to create the trust at the time of creation.

Unlike will contests, Trust litigation is a separate legal action that is brought independently of the Probate Court. Fla. Stat. 736.0201 provides:

Except as provided in subsections (5) and (6) and s. 736.0206, judicial proceedings concerning trusts shall be commenced by filing a complaint and shall be governed by the Florida Rules of Civil Procedure.

This means that a dispute regarding the validity of a Trust document is a separate lawsuit brought outside of the probate administration or probate proceedings of an estate.

Actions Against A Trustee For Mismanagement of Trust Assets

Trust assets must be managed by the trustee for the best interests of the beneficiaries. A violation of this obligation by the trustee creates a cause of action for a breach of trust. This basic concept is codified in Florida Law under Fla. Stat. 736.1001 which provides: (1) A violation by a trustee of a duty the trustee owes to a beneficiary is a breach of trust. (2) To remedy a breach of trust that has occurred or may occur, the court may:

Compel the trustee to perform the trustee’s duties
Enjoin the trustee from committing a breach of trust
Compel the trustee to redress a breach of trust by paying money or restoring property or by other means
Order a trustee to account
Appoint a special fiduciary to take possession of the trust property and administer the trust
Suspend the trustee
Remove the trustee as provided in s. 736.0706
Reduce or deny compensation to the trustee
Subject to s. 736.1016, void an act of the trustee, impose a lien or a constructive trust on trust property, or trace trust property wrongfully disposed of and recover the property or its proceeds; or
Order any other appropriate relief.

Damages to the successful beneficiary include a repayment of damages done to the proper trust beneficiaries and/or a disgorgement of any profits realized by the wrongdoer for the breach.