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Homestead in a Trust? Reprinted March 1995 If somewhere along the line you have put your homestead into a trust, perhaps you might want to reconsider that action. There are a few specific reasons discussed below that make this more critical than ever before. The first reason deals with probate. In December 28, 1994, District Court of Appeal of Florida, Third District, Elmovitz v. Estate of Zimmerman, 647 So2d 1064, the ruling was that upon devise to a trust established by will, testator's property lost its homestead status. You might say, "What does that mean to me?" Under current probate rules, the homestead is exempt from claims of creditors. If there are claims filed against the assets of an estate, the proceeds of the sale of the home in a trust would have to be used to pay creditors if the estate did not have sufficient assets to pay creditors. In this specific case above, the house was subject to a $65,000 claim filed against the estate. This could make substantial difference to beneficiaries. The second reason deals with Medicaid. As some of you know, the homestead is an exempt asset under current Medicaid guidelines when totalling the countable assets in applying for Medicaid benefits. This means you could have a $50,000 home or a $100,000 home, any home of whatever value; it is protected from having to be sold to be pay nursing home bills. According to the HRS Manual in November 1994, placement of an excluded asset or resource in a trust results in the asset becoming a countable resource. If you recall in the last issue of ParriScope, we said that a couple could have a combined total of $74,820 in assets excluding one home (homestead) along with other excluded items. Needless to say, there could be specific reasons why someone wants to put their homestead in a trust. However, the decision should be an informed decision. Here in Florida, the homestead receives special consideration and sanctity. Individuals should keep that in mind when considering putting their homestead in a trust. Talk to Ray.
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Copyright © 2002 Law Firm of Raymond L. Parri, P.A., All rights reserved.
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