Video Summary


What are the homestead laws in Florida?  The homestead laws were provided for in the Florida Constitution. The one that people are most familiar with is in Article XV that deals with real estate taxes. And it provides that if you’re a resident of Florida and you live in your home and you move in and own it before the end of any particular year, you can apply for homestead exemption by March 1st of the following year and obtain homestead exemption on taxes. That means if you were granted homestead exemption, you get exempt the first $25,000 of your assessed valuation or taxable valuation from taxes which saves you about $500. You have to pay taxes on the taxable value of the property from $25,000 to $50,000. You get to exempt from $50,000 to $75,000 all taxes except school taxes and that will save you about another $300 and then you pay for all the tax on anything above $75,000.

 

There is an added benefit to having homestead exemption. It’s under Save Our Homes and I’m not sure where that’s provided for in the Constitution, but the net effect of it is that if you have homestead exemption the tax value of your property will not increase by more than three percent or the cost of living index, the lesser of the two. In years past that’s gone up very, very little and the longer you own the property the more you can appreciate it. So if your tax valuation does not go up every year, well then your tax bill should remain approximately the same since it’s only a millage rate and hovers around two percent in the county. It’s a little bit more if you live in a city.

 

So homestead exemption is really a great benefit and the longer you live in your home the more you appreciate it. The other nice thing about homestead and if you decide to sell your home and move to another house, whether you’re upsizing or downsizing, be sure you go whenever you apply for a homestead exemption on your new home, take your old tax bill with you and advise the property appraiser when you apply for homestead exemption that you had homestead on your prior home and there is something about portability, meaning they’ll prorate your old assessed valuation against the new assessed valuation and you can get to carryover some of the benefits from having homestead exemption on your original home.

 

So that’s I believe under Article XV as far as the tax valuation. Under Article X, Section 4 of the Florida Constitution, it provides that the creditors cannot place a lien or a claim on your homestead property. That’s property that you live in and you can protect that from the claims of creditors. It doesn’t matter how much you owe your credit card company or doctors or anyone else other than the United States Government, they cannot take away your home. Now there is an exception for the Internal Revenue Service and the federal government in that they can attach your home even though it’s homestead property. If you file for bankruptcy, there are certain rules as far as be able to exempt it as homestead. Here again that’s governed by federal law and will tell you how long you’ve lived and if you’ve owned the home for a certain number of days which I think comes to about two or three years, well then you can exempt the property. A lot also has to do with how much your homestead is worth as far as how much the exemption can be. But the Florida Constitution does protect your home from creditors.

 

Another thing that you don’t want to think about but if you pass away and you leave your home to your children or your grandchildren or your heirs, that exemption says inures or passes down to your children. So if you leave a bunch of credit card debt or any kind of medical bills, whatever you leave behind as far as bills are concerned and you leave your home to your children other than a mortgage, they don’t have to pay the creditors any money and the house or your homestead passes to your children.

 

This is a very complicated subject and so I might do another video about whether or not to put your homestead in a trust or a joint trust as far as that’s concerned and also the effects of transferring your home during your lifetime on Medicare and Medicaid. So if you have any questions about homestead, give me a call at 727-847-2288.

 

 

Video Summary


Can I use renovations done to my home office as a tax write-off if I’m not self-employed?

 

This is an issue that you need to talk to your CPA about is whether or not you can write off a portion of your home as far as the expenses, the utilities and depreciate a portion of your improvements as a home office.  I don’t necessarily believe that you have to be self-employed to do the write-off.  However you do need to devote it to your particular job as far as that’s concerned as being a requirement.

 

 

But the answer to the question lies between you and your certified public accountant as to whether or not you can write it off and how much you can write off and there is a certain, I don’t think a bright line test but it’s more of a feel for the CPA to be able to tell you what percentage of the utilities and the renovations that you would be able to write off.  So I urge you to call and speak to your CPA about that issue.  But if you have any other issues well give me a call at 727-847-2288.

 

Video Summary


Paying for elder care. If you are looking for care for yourself or a loved one, you must understand how you’re going to pay for it. Many people have a misperception that Medicare, social security or Medicaid will pay for their long-term care needs. Medicaid does cover nursing facility care for the impoverished and Medicare may cover some of the costs of nursing center care for those who require short-term rehabilitation. But both require individuals to meet certain physical and medical standards. Generally speaking neither covers the entire cost of long-term home health care and assisted living care.

 

Personal resources. Most personal care home residents and roughly 20 percent of nursing center residents pay for costs out of their own savings and assets. Frequently when people enter a nursing center for extended long-term care, they first pay for their care out of their own assets and then expend their resources and apply for Medicaid. This can be prevented by properly planning for long-term care in advance. There are many estate planning tools that will enable one to utilize their resources for their own benefit prior to expending their resources in order to exhaust them to meet the income and asset standards required for Medicaid coverage.

 

Private insurance. For the most part unfortunately private medical insurance does not cover the cost of personal care or nursing center care except in very specific circumstances. Long-term care insurance. Long-term care insurance can be purchased to provide some payment for nursing center care and home healthcare as well as assisted living care. Some Medicare supplementary insurance policies which are often referred to as Medigap insurance also may provide some limited payment. Many health maintenance organizations, also known as HMOs and other coordinated care plans participate in the Medicare and Medicaid programs. These healthcare plans often cover certain benefits in addition to those required by Medicare and Medicaid and are experienced in coordinating a member’s healthcare.

 

Some HMOs may also offer more medical or supportive services. Others may not require a hospital stay before approving a nursing facility admission. Medicare. Medicare is a federal health insurance program for people age 65 and older as well as certain people with disabilities younger than 65. Historically Medicare was never intended to provide the kind of extensive support required by today’s elderly population. Medicare pays for acute, episodic and rehabilitative care as well as some preventative care. It does not provide a comprehensive long-term care component and generally does not cover personal home care costs but may pay for some short-term services, for example physical and other therapies. But it is also contracted through a home healthcare agency and provided to the resident at their home.

 

Medicare covers only those nursing center services rendered to help someone recover from acute illness or injury. Medicare is administered by the Federal Medicaid Services and is divided into two parts:  hospital insurance which is commonly referred to as Part A and medical insurance which is commonly referred to as Part B. Eligibility for Medicare. Nursing center coverage falls under Part A of Medicare and is very, very limited. If certain conditions are met, Medicare only pays for the first 20 days of care in a skilled nursing center. For the 21st through the 100th day the patient must share or co-pay for the cost of care by paying a daily co-insurance rate which does change yearly. This is typically what a Medigap policy will cover.

 

Medicaid. Medicaid is a joint federal state government program designed to provide healthcare assistance to low income people with limited assets and it has become the major player for services for care in skilled nursing centers across the country. Eligibility. Medicaid will pay for nursing center care for those individuals who meet a state determined poverty level and certain health-related criteria, provided the nursing center is certified and meets a stringent set of government standards.

 

The Florida Medicaid Program. In Florida the Agency for Healthcare Administration, also commonly referred to as AHCA, is responsible for Medicaid and has implemented the statewide Medicaid Managed Care Program. Long-term care insurance. Long-term care insurance can protect personal assets and inheritance for the family, provide greater choice in the selection of long-term care settings such as home care, nursing care, etcetera and generally provide for financial security. Because cost for long-term care policies can vary widely, even for similar policies, shopping and price comparison is very important.

 

Long-term care insurance policy premiums are set based upon several factors such as age, health, length of deductible period, the amount paid and the duration of the benefits. Higher daily benefit and optional features such as inflation protection and non-forfeiture benefits do increase the premium. According to the Health Insurance Association of America, the annual premium for a low option policy for a person at age 50 is about $850 annually. For a person at age 65, that same policy costs about $1,800 and a person at age 79 about $5,500. You should consult with your local insurance or financial advisor on the current costs in your area. Counseling services may also help you select a policy which is most appropriate to your specific needs.

 

People purchase long-term care insurance for several reasons. If you are deciding whether and when to buy long-term care insurance, you should consider the following questions. Will you income cover long-term care expenses along with other ongoing expenses?  If you purchase such insurance, can you pay for the deductible period and coinsurance?  Can you pay the premiums now?  Can you pay it if the premiums rise?  Will you be able to pay the premium if your spouse dies?  Will you be able to pay for upgrading benefits to meet inflation?  Would you become eligible for Medicaid if you have large medical bills or entered a nursing home where your average yearly cost could run up to almost $30,000?

 

According to the Centers for Medicare and Medicaid Services, before signing a long-term care insurance policy, you should also ask if you have a period during which to cancel the policy and receive a refund for the first premium. Reverse mortgages are also a way to fund long-term care for seniors who are desirous in staying in their homes. Seniors who live at home and have a low or no mortgage balance can use a portion of their home equity for in-home care through a federally-insured loan program.

 

Veterans’ benefits may also be a way to fund long-term care. Aid & Attendance, a largely unknown benefit provided through the VA provides monetary assistance to qualified veterans who have served during times of war as well as their surviving spouses. This benefit can be used to fund long-term care.

 

Life insurance. Life insurance may also be a way to fund long-term care. Private third party organizations now allow seniors to use a life insurance policy to help pay for home health by converting a portion of the policy’s death benefit into a long-term care benefit paid directly to a care provider.

 

 

Funding long-term care takes proper planning. And Waller & Mitchell has the tools to assist you and/or your loved one with this endeavor. Please contact us at 727-847-2288 to set up an appointment to discuss all of your planning needs and we will be happy to assist you.

 

Video Summary


Reasons for Medicaid planning.  Medicare or long-term care insurance benefits may be unavailable or insufficient to cover the costs of nursing home institutionalization.

While Medicare and HMOs may pay part of the nursing home care for the first 100 days, they will only pay for quote unquote skilled care, and a three-day hospitalization requirement must be fulfilled before any days of care and coverage will be allowed.  The first 20 days full expenses will be paid by Medicare or Medicaid.  And for the next 80 days the patient must pay a sizeable per day coinsurance amount.

 

Nursing homes in metropolitan areas of Florida normally charge $250.00 per day or more simply for room and board.  Thus, the Medicare and HMO coverage will not pay the entire bill.  Further, because of the narrow definition of skilled care, the national and Florida average for Medicare and HMO coverage is 10 to 20 days and not the full 100 days allotted.  Long-term care calls for long-term money management to provide essential health and quality of life services and wears over and above that furnished by the Medicaid benefits.  The burden of costs of catastrophic medical care is especially poignant in cases of married couples.  Community spouses who do not plan ahead, often live in poverty to keep an ill spouse in a nursing home.

 

If you have any questions regarding skilled nursing care and/or Medicaid planning, please give us a call here at Waller and Mitchell at 727-847-2288.

 

Video Summary


Is a land contract still a viable means of purchasing a home?  The answer to the question is, is that Florida does not have land contracts.

 

I know Michigan has land contracts and any number of other states.  And the reason why many people use land contracts is that they’re in a state that has a non-judicial foreclosure statute which allows them to foreclosure, or get the property back through non-judicial procedures.  Florida is a judicial procedure state which requires you to go through a court proceeding to foreclose and take back property.  And so a land contract, the closest thing we have to it in Florida is called an agreement for deed.  An agreement for deed is the same as – has to be enforced the same as a note and mortgage and therefore you don’t see too many agreements for deed, because although the seller retains the title to the property and puts you in possession, if the buyer defaults they still have to go through a foreclosure process and so it defeats the purpose of using a land contract.

 

The other way of avoiding going through a foreclosure process if you’re the seller, and the buyer has a very small down payment, is to go with a lease with an option to purchase.  And that way if the buyer defaults in the payment, you’re then in a position to evict them rather than going through a foreclosure process, which is much quicker and less expensive than a foreclosure process.  It’ll probably take six, nine months to a year to foreclose a piece of property and costs and anywhere from $4,000.00 to $5,000.00.  Whereas with an eviction process you’re looking at probably 30 to 45 days and approximately $1,500.00 to $2,000.00 for an eviction process.  So if you talk land contracts in Florida, they’re gonna look at you with a blank stare, because it’s something that comes out of the Midwest or a state that has non-judicial foreclosures, and they are so you don’t have those in Florida.

 

If you have any questions about land contracts or buying and selling real property with owner financing, well give me a call at 727-847-2288.