What Adult Children Need to Know About Medicaid “Spend Down”


It is never easy to consider a time when an aging parent may need long-term care assistance outside the home. Yet, it is a reality that many adult children find themselves facing as their parents age.

While the costs of long-term care can be daunting, there are programs such as Florida Medicaid that exist.

These programs aim to help aging parents and their adult children afford these monthly costs.

It is important for adult children to make informed choices before spending down a parent’s assets to gain eligibility for the parent’s Medicaid nursing home assistance. 

The reason why is because some of the assets of their parents may be exempt and therefore not considered for Medicaid eligibility. Let us share some important information for you on the treatment of assets in our blog.

The spouse who enters into the skilled nursing home is called the “institutionalized” spouse. This spouse cannot cannot own more than $2,000 in countable assets. The healthy or “community” spouse, however, can own more. The community spouse may not have countable assets exceeding $126,420 if the couple wants to be eligible for Medicaid nursing home assistance. 

What are examples of non-countable assets?

Some non-countable assets that will not be counted toward ineligibility consist of:

  • A homestead having an equity interest less than $585,000 after deducting the mortgage, 
  • A vehicle regardless of its age or value, and a second vehicle if it is more than seven years old,
  • The cash value of a whole life insurance policy having a face value of $2,500 or less,
  • The full value of an irrevocable burial contract regardless of the amount,
  • There is a $2,500 exclusion for each parent’s bank account that has been designated for burial expenses,
  • If real property is held in any form of shared ownership, only the fractional interest of the parent requesting long-term care assistance, or the spouse will be counted, and
  • Another non-countable asset is a Medicaid Qualifying Annuity owned by the community spouse regardless of its value.  

Further, also not counted is the fair market value of a residence being occupied by the nursing home resident’s spouse, a child under age 21, or a blind or disabled child living in the residence. It is important that adult children remember that a homestead for the community spouse to have an exempt asset will still result in the annual payment of homeowner’s insurance, taxes and ongoing maintenance costs. 

We know this article may raise more questions than it answers. Each and every day we work with adult children and Florida seniors to help them find a way to pay for long-term care costs. Do not hesitate to contact us to discuss your family’s needs with our attorney today.