How do I best protect my grandmother’s property in case she becomes infirm and must go into a nursing home or long term facility?

How best to protect your mother's property depends on the Medicaid rules in your state.  I recommend that you consult an Elder Law attorney as soon as possible to make sure you have the proper documents in place in the event your mother requires nursing home care.

Most long term care facilities are too expensive for individuals to pay out of pocket.  The average monthly cost for a semi-private nursing home room in Florida is $6,780.  This exceeds $81,000 per year.  It is easy to see why almost all residents require assistance sooner or later.

Medicaid pays for long term care in nursing homes but has strict (and low) monthly income and total asset limits.  It certainly is possible for your mother to spend all of her money, sell all of her assets including her home, and then apply for Medicaid assistance.  This is not, however, required.

Each state exempts some assets from counting for Medicaid purposes.  In Florida, the family homestead is exempt.

Each state also permits seniors to transfer some assets for approved purposes and still qualify for Medicaid assistance.  For example, Florida permits seniors to pre-pay for a funeral and burial, contract for necessary personal services, invest in income-producing property, purchase specific types of annuities, or place funds in a pooled trust.  Other states allow similar transfers.

What is not allowed in any state is GIFTS.  Under federal law, most states must "look back" over the past 5 years to see if a Medicaid applicant has made gifts in order to qualify for Medicaid.  It is, therefore, important that seniors do not give away substantial amounts of money or valuable assets without consulting an Elder Law attorney.  If your mother has made such gifts, I recommend that you and she consult an Elder Law attorney about the effect of these gifts.

Elder law attorneys are well versed in the Medicaid rules.  When it is time to enter a nursing home, they can assist to preserve assets and apply for Medicaid benefits.  Even if the senior's monthly income exceeds the state Medicaid limit, Elder law attorneys can usually structure the monthly income to qualify for Medicaid benefits (this is accomplished in Florida through a "qualified income trust.").

Elder law attorneys can also assist before nursing home care is needed.  They can review or prepare legal documents to make sure they are consistent with Medicaid eligibility rules and allow sufficient flexibility to preserve assets.  This is why I recommend that you and your mother consult with such an attorney now.  She will save thousands of dollars by taking steps in advance of her need.