My brother says lawyers can get him a Medicaid nursing home in Florida for a 'hefty fee,' despite his assets. Is this a scam?

By Quentin Fottrell

 'I do not believe there is a way to preserve assets and still qualify for Medicaid' 

 "My brother only has Medicare Parts A and B; he did not enroll in a Medicare supplement at 65 and now has too many health issues to qualify." (Photo subject is a model.) 

 Dear Quentin, 

 I have a brother who lives in Florida. He has never been married or had any children, and I live in another state. He has a progressive medical condition. His physician has told him that he needs to move permanently into a nursing home where he can receive rehabilitation services several times a week. 

 My brother only has Medicare Parts A and B; he did not enroll in a Medicare supplement at age 65 and now has too many health issues to qualify for a traditional supplement plan. He has told me that he wants Medicaid to pay for his nursing-home care. However, he does not want to spend all of his savings or liquidate his small home. 

 A friend told him that there are attorneys in Florida who, for a hefty fee, can "find a way" for someone to keep their assets and still qualify for Medicaid. I am not sure whether this is accurate or whether such services could be a scam. My brother really needs to be in a nursing home to receive the prescribed intensive rehabilitative services. 

 I do not believe there is a way to preserve assets and still qualify for Medicaid. My understanding is that a person must spend down their assets to about $2,000 to qualify, and that there is a five-year look-back. I do not want my brother to be taken advantage of by an unscrupulous attorney who might promise to help him qualify for Medicaid. 

 The last thing he needs is to be charged thousands of dollars in lawyer fees. 

 The Sister 

 Don't miss: 'I want safe returns': I'm 73 with $300,000 saved. I'm not interested in the stock market. What should I do? 

 You can email The Moneyist with any financial and ethical questions at qfottrell@marketwatch.com. The Moneyist regrets he cannot reply to questions individually. 

 There are many legal ways to qualify for Medicaid. 

 Dear Sister, 

 A lot depends on the extent of your brother's assets - and timing. 

 I'm worried by the "hefty fee." A lawyer promising secret loopholes is probably best avoided. Rule No. 1: Medicare generally does not cover long-term nursing-home care. Rule No. 2: Breaking Medicaid rules can be charged as a felony. 

 Rule No. 3: There are many legitimate estate planning strategies. Florida does have a medically needy or "share of cost" program, which allows individuals with income slightly above the Medicaid threshold to qualify by treating the excess income as a deductible. 

 If your brother's monthly expenses equal or exceed the "share of cost," Medicaid can cover authorized medical services, including outpatient care, prescriptions and home care for the rest of that month. There are many legal ways to qualify for Medicaid. 

 Every state sets a home-equity-interest limit to determine if a person's home will be counted toward or exempt from the Medicaid asset limit. Florida, New York and California, among other states, exempt a primary residence from assets calculated. 

 In many states, if a person or their spouse needs to live in the home or have plans to return to it, the home can remain exempt. In Florida, if you are married and your spouse lives in the home after you move to a nursing home, the home is exempt from Medicaid. 

 Five-year lookback 

 As you say, there is a five-year Medicaid lookback period to review whether an individual divested themselves of assets in order to qualify for benefits. To be eligible, you must have no more than $2,000 in countable assets. 

 In Florida, long-term care applicants must have a gross monthly income of $2,991 or less (including Social Security) and no more than $2,000 in countable assets ($3,000 for couples). "Exempt" assets include one's primary home (up to a $730,000 equity limit) and one vehicle. 

 Fort Myers, Fla.-based Dorcey Law says legitimate spend-down strategies include paying off debts (credit cards, mortgages and medical bills), home improvements, prepaying for irrevocable funeral/burial contracts and paying for private caregivers. 

 "Common countable assets include savings and checking accounts; stocks, bonds, and CDs; IRAs and most retirement accounts; secondary vehicles; real property other than your homestead; and life insurance with a cash value exceeding $2,500," it adds. 

 Your brother should know that Medicaid estate recovery is a federal mandate requiring states to seek reimbursement for long-term-care services from the estates of deceased recipients, focusing on your brother's home and other probate assets. 

 Common planning mistakes 

 Avoid putting off Medicaid applications until the 11th hour, making cash gifts that exceed tax-free limits and/or transferring property without fully understanding Medicaid rules; and failing to consider irrevocable trusts or other sound legal strategies. 

 Florida, among several other states, has enhanced life-estate deeds - known as "lady-bird deeds" - which automatically exempt all homes with such a deed from the Medicaid estate, protecting the house from subsequent Medicaid asset-recovery efforts. 

 Another way to comply with the Medicaid five-year look-back rule: Transfer money to a pooled special-needs trust run by a charitable organization. Annuities can also be used as part of Medicaid planning, if done with the guidance of a trustworthy attorney. 

 A Medicaid asset-protection trust or a special-needs trust could protect your brother's assets if he wished to apply for Medicaid, as long as this is done before the five-year look-back period. These trusts can be complicated and Medicaid can challenge them. 

 They can include stocks and bonds, bank accounts and CDs, and vacation homes and rental properties. With a MAPT, the parent would give up control of those assets. Transferring assets within five years of applying for Medicaid can trigger a penalty. 

 Medicaid asset protection trust 

 This can be a highly effective asset preservation strategy, according to The Karp Law Firm, which has offices in Florida. If properly managed and funded, after five years, "all of the principal will be deemed an unavailable asset if you apply for Medicaid." 

 "Neither you nor your spouse may draw from the principal," the law firm says. "However, you may direct the trustee to withdraw principal to give to others, who may in turn spend those funds on you. 

 "This is the way you can get funds from the irrevocable trust if you need them," it adds. "You may give detailed instructions as to how the assets are managed. You may even retain the right to change the trustee at any time." 

 "Although the trust is irrevocable, you have the right to change the beneficiaries," The Karp Law Firm says. "In the unlikely event that you ever need to terminate the trust, you may do so if the trustees and beneficiaries agree." 

 Another way to comply with the Medicaid five-year look-back rule - depending on the laws of your state, although Florida is included - is to transfer money to a pooled special-needs trust run by a charitable organization. 

 Pooled special-needs trust 

 A pooled special-needs trust is typically managed by a nonprofit organization that combines assets from multiple people with disabilities into a single fund to maintain eligibility for government benefits like Medicaid and Social Security Insurance. 

 For other Florida residents reading this, Medicaid-compliant annuities could also help a person with a spouse who has excess assets qualify for Florida long-term care Medicaid (Nursing Home or Assisted Living Waiver) without spending all their savings. 

 "If you are the healthy spouse, you can use assets over the Medicaid limit to purchase term-limited annuities, transforming those assets into income," according to the Florida-based law firm DeLoach, Hofstra & Cavonis. 

 "Medicaid compliant annuities give fixed monthly payments to the well spouse, supplementing their income or Social Security benefits," it says. "As the 'well' spouse, you would be the annuity owner and payee." 

 "If your partner passes away before you do, your annuity payments will continue until the end of the term," the law firm adds. "If you pass away first, the remaining annuity funds are used to pay back Medicaid." 

 "Finding a way" is OK, as long as it's legit. 

 Related: 'This is a first-world problem': I can't roll over my $800,000 401(k) from my prior employer. What did I do wrong? 

 More columns from Quentin Fottrell: 

 'We're living the simple life': I was a fisherman and my wife was a nurse. We retired with $6 million. Here's how we did it. 

 My PayPal account received money from the Philippines with two phone numbers listed. I called them. Big mistake. 

 'The bank told me I could be liable': I found out why my brother, who has a reverse mortgage, ran out of money 

 Check out The Moneyist's private Facebook group, where members help answer life's thorniest money issues. Post your questions, or weigh in on the latest Moneyist columns. 

 By emailing your questions to The Moneyist or posting your dilemmas on The Moneyist Facebook group, you agree to have them published anonymously on MarketWatch. 

 By submitting your story to Dow Jones & Co., the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties. 

 -Quentin Fottrell 

 This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal. 

(END) Dow Jones Newswires

03-29-26 0856ET

Copyright © 2026 Dow Jones & Company, Inc.