Asset Protection: Can a Trust Protect My Home?

When it comes to asset protection, Florida is one of the best states in the country to live. In fact, people in other states sometimes move to Florida just to take advantage of the state’s asset protection laws as well as the warm weather and ocean breeze. While proper asset protection planning can protect your assets, your home may automatically be protected under Florida law.

Florida Homestead

If you are worried about how nursing home bills, creditors and taxes might jeopardize your ability to leave your home to your heirs, you should speak to a lawyer as soon as possible. Depending on the value of your property, your home may already be protected under Florida homestead laws. For individuals who want to protect their home and qualify for Medicaid, this may be the single most important law. In Florida your homestead property is considered an exempt asset and the value up to $560,000 can be protected. In addition, Florida homestead property is exempt from the claims of creditors after you pass away. Medicaid cannot require you sell your home during lifetime or access it’s value after death. In some planning scenarios, however, you may want to consider an asset protection trust.

It’s important to understand that if you are a single person who is going into a nursing home, and your home is valued at less than $560,000, the house is protected, but all of your remaining income will go to Medicaid. This means you will have no money left over to pay household bills such as mortgage, taxes, insurance, utilities, and maintenance. To keep your home, your family members may need to raise funds on their own. Renting the home will result in a loss of the homestead exemption and will impact Medicaid eligibility.

Using an asset protection trust

One planning option is an irrevocable Medicaid asset protection trust (MAPT). Assets like cash, investments and real property can be transferred to the trust in order to start the five-year look back clock. An experienced elder law attorney can guide you through this preventative planning technique and help you accomplish necessary asset transfers five years before you apply for Medicaid. Creating an irrevocable trust may be the right option if you want to preserve the value of your home without disrupting veteran’s or Medicaid benefits. In addition, your heirs can get a step-up in basis after your death and avoid potential capital gains tax.

It’s never too late to plan for the future. If you are worried about the aging process and how it may affect your ability to leave your children, spouse, and other relatives an inheritance, contact The Law Offices of Hoyt & Bryan today. Our experienced legal team works diligently to help Floridians protect their homes and other legacy assets.