Medicaid's 5-year look-back — the planning that protects the home in time.

Long-term care in Florida is expensive. Private-pay nursing-home rates routinely exceed $120,000 annually. Most families do not self-fund long-term care — they apply for Medicaid. Medicaid eligibility turns on asset and income limits, and the 5-year look-back is the rule that blocks last-minute transfers.

What the look-back does

When an individual applies for long-term-care Medicaid, the agency reviews all uncompensated transfers in the 60 months preceding the application. Gifts, below-market sales, and asset transfers to family members trigger a penalty period — a window of ineligibility calculated by dividing the transferred value by the state's average monthly nursing-home cost.

What is NOT a transfer for look-back purposes

• Transfers between spouses.
• Transfers to a blind or disabled child.
• Transfers to a caregiver child who resided in the home for the 2 years before institutionalization (the 'caregiver child exception').
• Transfers to a sibling who has an equity interest and resided in the home for 1 year before institutionalization.
• Transfers into certain special-needs trusts.

Effective planning tools

1. 01Irrevocable trusts — transfers into the trust start the 5-year clock.
2. 02Ladybird deeds — enhanced life estates that transfer the property at death without triggering look-back penalties.
3. 03Personal services contracts — compensation to family caregivers at fair-market rates.
4. 04Qualified income trusts (Miller trusts) — addressing income limits rather than asset limits.
5. 05Long-term-care insurance — shifting the problem to an insurer rather than solving it with transfers.

What planning is not

Medicaid planning is not 'hiding' assets. Transfers that are not disclosed or are documented misleadingly produce fraud liability. Legitimate planning is done openly, with documented compensation, and with the expectation that every decision will be reviewed.