Does Moving to Nursing Home Forfeit Homestead Protection?

Does an elderly person lose Florida homestead protection when they move out of their house and into a nursing home?

The answer is yes. You may not be able to still qualify for Florida homestead protection when you move out of the Florida homestead and into a nursing home fulltime.

A Florida resident does not lose homestead protection when they move out of their residence as long as they intend to return to the house.

When a person moves to a nursing home or assisted living facility the move is usually permanent, but not necessarily permanent. Whether the person intends to return to his former home is an issue of fact. It is difficult to show the debtor’s intent to return when the debtor suffers from incapacity sufficient to warrant full-time care.

In most cases, homestead protection will be lost soon after the move into the nursing facility. Whereas younger adults often relocate temporarily for jobs or education in locations far away from Florida, moving to a full-time care facility is usually irreversible.

Fraudulent Transfer Issues

In this type of fact situation, if the parent deeds the home to his children while it is homestead property the deed would not be a fraudulent conveyance, even if intended for creditor protection, because the homestead already is exempt property.

The transfer of exempt property to a third party cannot be a fraudulent conveyance. If a person deeded the house to children shortly after moving to a nursing facility, the transfer may survive if the family could show that at the time of the transfer, the debtor/ parent had not yet decided to remain permanently in the nursing home (assuming he is capable of explaining his intentions).

Each week of residency outside the house in a full-time care facility makes defense of the homestead more difficult and increases the likelihood that a deed to other family members will be reversed.