Does Having Savings Disqualify You from Medicaid in Florida?

Many Florida families worry about Medicaid eligibility when a loved one has significant savings in the bank. The good news is that excess assets do not have to be fully spent on nursing home care. With proper planning, you can often qualify for benefits while preserving money for family.

Lady bird Deeds and Home Protection

A lady bird deed (also known as an enhanced life estate deed) is a smart way to protect your home. It allows the property to pass directly to your chosen beneficiaries—such as children or a trust—completely bypassing probate.

In Florida, Medicaid cannot place a claim on homestead property that transfers through a lady bird deed. This avoids the time, stress, and expense of probate. However, a lady bird deed does not protect bank accounts or other assets. Savings remain countable for Medicaid purposes and are treated separately from the home.

Income Eligibility in Florida

If monthly gross income is low—for example, less than $2,000—it's usually not an issue. Florida allows up to $2,991 in gross monthly income while still qualifying for Medicaid. Income and assets are evaluated separately, so bank savings count as assets, not income.

Asset Limits: Reducing Countable Assets

Medicaid considers liquid assets countable, including:

• Savings accounts

• Brokerage accounts

• Stocks

• Other easily accessible funds

The general asset limit is $2,000 (plus small allowances). You need to show that on at least one day in the month, countable assets were at or below this level.

What Not to Do: Avoid Gifting Money

Do not gift excess savings to family members if applying for Medicaid soon or within the next five years. Medicaid treats this as an uncompensated transfer, which can trigger penalties and delay eligibility longer than simply paying for care.

Compliant Ways to Reduce Assets in Florida

Several legal strategies allow you to lower countable assets while directing funds to loved ones:

1. Purchase a Burial Policy Buy an irrevocable burial contract or policy. Be careful—any cash surrender value could count as an asset if it pushes you over the limit.

2. Cover Facility-Related Expenses Pay for moving costs, security deposits, or other items not covered by Medicaid when entering a facility.

3. Personal Services Contract (Ideal for Families with a Caregiver) This allows a lump-sum transfer to a child or caregiver in exchange for ongoing services, such as:

   • Driving to doctor, hair, or nail appointments

   • Running errands (groceries, dry cleaning)

   • Doing laundry and cleaning

   • Helping balance checkbooks or pay bills

   • Delivering meals and supplies

   The transfer amount is based on life expectancy and fair value of services. A qualified elder law attorney must draft the contract, which can be signed by the parent or an agent under power of attorney.

   Once signed, the full lump sum (potentially most or all of the excess savings) transfers at once. The recipient reports it as income and pays any applicable taxes, which can come from the transferred funds.

   Key Benefits: The money compensates family for care instead of going to the facility. Any remaining funds stay with the caregiver—often far better than spending everything down.

4. Pooled Trust (When No Trusted Caregiver is Available) Transfer funds to a special trust managed by a nonprofit. The money can supplement the parent's needs during

5. life, but any remainder typically repays Medicaid after passing (unless there's a qualifying spouse).

Final Thoughts

A lady bird deed effectively protects the home and skips probate, but bank savings require separate strategies. With low income and tools like a personal services contract, many families qualify for Medicaid while keeping significant assets for children or loved ones instead of losing them to care costs.

Proper planning makes all the difference—consult a Florida elder law attorney to explore what works best for your situation.

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