1. The Fear, and Why the Law Disagrees With It
Most spouses walk into this conversation believing the same thing, that before Medicaid pays a dime, the couple must spend down to nothing, and the husband or wife at home goes broke alongside the one in care. That fear has a name in the law, spousal impoverishment, and Congress wrote a set of rules specifically to prevent it. Florida applies them.
Here is the short version. The spouse who stays home (the law calls you the community spouse) keeps the house, keeps every dollar of your own income, and keeps a protected share of the couple’s savings. The question is never whether you will be protected. It is how much more than the default the right planning can protect.
What Are the Community Spouse Rules for Medicaid in Florida?
A common question I hear is, “What are the community spouse rules for Medicaid in Florida?” Four rules decide almost every married case. First, the spouse at home keeps up to $162,660 in countable assets, measured on the day of the application, and the applicant keeps $2,000. Second, the income of the spouse at home is never counted, and only the applicant’s income is tested against the $2,982 cap. Third, the home is exempt while the spouse at home lives in it, with no equity cap. Fourth, assets can move between spouses with no penalty, but the couple’s total still counts on the application date, so the allowance is the ceiling on what the move protects. The rest of this page takes those four rules one at a time.
2. What You Can Keep: the $162,660 Asset Allowance
Clients are often confused about which assets count, and ask me, “What can I keep if my husband goes into a nursing home?” The applicant spouse can have no more than $2,000 in countable assets. You are not held to that number. The community spouse keeps a separate protected share, called the community spouse resource allowance, of up to $162,660 in countable assets under Florida’s current rules.
And "countable" is narrower than most people think. The allowance sits on top of the assets that never count at all, including the home you live in, one vehicle, household goods and personal belongings, and prepaid burial arrangements. A couple with a paid-off house, a car, and $150,000 in the bank is already under the limits before any planning happens.
Holding more than the allowance is not a dead end either. Excess countable assets can often be converted rather than spent. A Medicaid-compliant annuity (a single-premium annuity drafted to meet federal safe-harbor rules) turns a lump of countable savings into an income stream payable to you, and your income is uncounted. Done correctly, the money serves you instead of disqualifying your spouse. Done incorrectly, the same annuity creates a transfer penalty, which is why the drafting rules matter. Estimate what a transfer penalty would look like →
3. Your Income Is Never Counted
Your Social Security, your pension, and your paycheck if you still work are not counted toward your spouse’s eligibility, and none of it has to go to the nursing home. Only the applicant’s income is tested, against Florida’s cap of $2,982 per month. If your spouse’s income is over the cap, that is fixable with a qualified income trust (a special account, sometimes called a Miller trust, that holds the income over the cap so your spouse still qualifies). We set those up for a flat $750.
Income can also flow toward you. If your own income is low, Florida’s rules let part of your spouse’s income be diverted to you each month instead of going to the facility, under what the rules call the minimum monthly maintenance needs allowance. The idea is simple. The spouse at home is entitled to enough to live on. The allowance figures adjust periodically, so we confirm the current numbers at the consult rather than print stale ones here.
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Book a free 30-minute consult. We will map your numbers against the spousal protections and tell you plainly what is already safe and what planning can add. Handled anywhere in Florida.
Book your free consult4. The House Is Safe While You Live in It
With a spouse living in the home, the homestead is an exempt asset with no equity cap. (The equity limit that applies to single applicants does not apply when a spouse is in residence.) Nobody makes you sell it, and it does not count against eligibility.
The longer-term question is estate recovery. After a Medicaid recipient dies, Florida can try to recoup what it paid for their care. Two protections matter here. First, recovery cannot proceed while there is a surviving spouse. Second, Florida’s recovery reaches only assets that pass through probate, which is the risk a lady bird deed solves by passing the home outside probate entirely. The full picture is on our page can a nursing home take your house in Florida; the short answer for a married couple is that the home is protectable at every stage, but the after-death piece takes a deed or a trust, not luck.
5. Transfers Between Spouses Are Penalty-Free
Most families have heard of the five-year look-back and assume any movement of assets triggers a penalty. Between spouses, it never does. Federal law exempts transfers to your spouse in any amount from the look-back. You can retitle accounts, move investments, or deed property from the applicant to the community spouse with no penalty, no waiting period, and no cap.
The no-penalty rule is the rule behind most married-couple Medicaid planning, and it has one limit that a Florida appellate court has enforced. Moving assets to the spouse at home creates no penalty period, but the couple’s total is still counted on the application date, so anything above the $162,660 allowance is still in the way whichever spouse holds it. The planning work is what happens next, keeping you under the resource allowance, converting any excess into protected income, and protecting the home for the family afterward. For couples, this usually means nothing needs to be gifted away at all, no penalty to create and no five-year clock to wait out. Compare that with the five-year trust planning that single applicants lean on, and the value of the spousal rules becomes obvious.
6. Spousal Refusal: the Deliberate Tool
Florida also recognizes a more assertive tool called spousal refusal. The spouse at home signs a written refusal to make their own income and resources available for the applicant’s care, and the applicant assigns their right of support to the state. Federal law then has the state look at the applicant’s own resources, and the state keeps the right to pursue support from the refusing spouse.
The refusal deserves honest framing, because Florida has drawn its limit in court. In the case retold at the bottom of this page, a wife moved about $227,000 of stock to her husband after he had signed a refusal, applied the same day, and was denied because the couple’s total still counted. The refusal protects the spouse at home’s income and their freedom from the state’s questions. What it does not do in Florida is lift assets above the allowance out of the count, so it is a deliberate tool with tradeoffs, used with counsel who can weigh the exposure. We prepare the refusal letter for a flat $500 when it fits, and whether it fits is decided at the consult with the couple’s numbers in front of us.
7. What This Looks Like as a Plan
Every married Medicaid case runs the same sequence. Sort exempt assets from countable ones. Apply the $162,660 allowance. Move what needs moving between spouses, penalty-free. Convert any excess into protected income for the spouse at home. Fix any income-cap problem with a qualified income trust ($750). Protect the home for after both spouses are gone, usually with a lady bird deed. The step-by-step eligibility rules are on how to qualify for Medicaid in Florida, and the eligibility calculator gives you a first read on your own numbers.
The qualified income trust is a flat $750. The broader Medicaid work, application handling, asset restructuring, annuity planning, spousal refusal, is quoted as a flat fee at the consult once we see the actual numbers, because the right scope depends entirely on what you own and what your spouse’s income looks like. Our Medicaid planning page covers how we work.
Frequently Asked Questions
What Is a Community Spouse in Florida Medicaid?
The community spouse is the husband or wife who stays at home (in the community) while the other spouse needs nursing-home care and applies for Medicaid. Federal and Florida law give the community spouse a protected set of resources and income, often called the spousal-impoverishment protections, so that one spouse’s care does not leave the other destitute. The protections include a resource allowance of up to $162,660 in 2026, the home itself, a vehicle, and in many cases a share of the applicant’s income.
How Much Money Can the Healthy Spouse Keep?
In 2026, the community spouse can keep up to $162,660 in countable assets, on top of the applicant’s own $2,000 limit. That allowance is separate from exempt assets, so it does not include the home you live in, one vehicle, household goods, or prepaid burial arrangements. Couples with more than the allowance are not stuck either. Tools like a Medicaid-compliant annuity can convert excess countable assets into protected income for the spouse at home.
Does the Healthy Spouse’s Income Count for Medicaid?
No. Your own income, your Social Security, your pension, your paycheck, is never counted against your spouse’s eligibility, and you are not required to spend it on the nursing home. Only the applicant’s income is tested against Florida’s cap, which is $2,982 per month in 2026. It can also flow the other way. If your income is low, part of your spouse’s income can be diverted to you each month under the minimum monthly maintenance needs allowance. The current allowance figures change periodically, so we confirm them at the consult.
Can Medicaid Take Our House if My Spouse Goes Into a Nursing Home?
Not while you are living in it. The home is an exempt asset while a spouse lives there, with no equity cap applied in that situation. And Florida’s estate-recovery program, the state’s effort to recoup care costs after a recipient dies, cannot proceed while there is a surviving spouse. The home does deserve attention in the plan, often with a lady bird deed, so that it stays protected after both spouses are gone, but the fear of losing the house while you live in it is not how the law works.
Can I Transfer Assets to My Spouse Without a Penalty?
Yes. Transfers between spouses are completely exempt from the five-year look-back. Moving accounts, retitling property, or shifting investments from the applicant to the community spouse creates no penalty at all, in any amount. This is one of the most important and least understood rules in Medicaid planning. Gifts to children trigger penalties, but transfers to your husband or wife never do. The planning question is what to do with the assets once they are in the community spouse’s name, and that is where the strategy comes in.
What Is Spousal Refusal in Florida?
Spousal refusal is a written statement by the spouse at home declining to make their own income and resources available for the applicant’s care, paired with the applicant assigning their support rights to the state. Florida recognizes the form, and the state keeps the right to pursue support from the refusing spouse. What the refusal does not do in Florida is take assets above the $162,660 allowance out of the count. A Florida appellate court affirmed a denial where the wife moved about $227,000 of stock to her husband after he signed the refusal and applied the same day, because the couple’s total still counted at application. The refusal is a deliberate tool for income and cooperation, used with counsel, and we walk through whether it fits your situation at the consult.
Common Situations
"We have to spend it all first." A wife in Cape Coral, whose husband had just entered memory care, came in convinced the couple’s $190,000 in savings had to be gone before Medicaid would help. The house and car were exempt, $162,660 fell inside her resource allowance, and a small Medicaid-compliant annuity converted the rest into income payable to her. He qualified; she kept her home, her car, her income, and effectively all of the savings.
The low-income wife at home. A husband’s pension and Social Security ran well over the income cap, while his wife at home lived on a small Social Security check. A qualified income trust fixed his eligibility, and an income diversion shifted part of his monthly income to her instead of the facility. She went from panicking about the electric bill to a stable monthly budget.
The house, after both are gone. A couple qualified the husband for Medicaid with the standard spousal protections, then asked what would happen to the house once the wife also passed. We recorded a lady bird deed passing the home directly to their daughters. Estate recovery could not proceed while the wife lived, and after her death the home passed outside probate, beyond recovery’s reach.
Sources of Law
- 42 U.S.C. §1396r-5 (the spousal-impoverishment protections: community spouse resource allowance, income rules, minimum monthly maintenance needs allowance; subsection (c)(3) is the basis for spousal refusal). law.cornell.edu (retrieved 2026-06-10)
- 42 U.S.C. §1396p(b)(2) (estate recovery only after the death of any surviving spouse); §1396p(c)(2)(A)(i), (c)(2)(B)(i) (transfers of the home and other assets to a spouse exempt from the transfer penalty); §1396p(c)(1)(F) (annuity safe harbor). law.cornell.edu (retrieved 2026-06-10)
- Fla. Stat. §409.9101 (Florida’s Medicaid estate-recovery program, limited to the probate estate). flsenate.gov (retrieved 2026-06-10)
- 2026 Florida ICP figures: applicant asset limit $2,000, income cap $2,982/month, community spouse resource allowance $162,660. Florida DCF/ESS Policy Manual and FAC 65A-1.712 to 1.713. (retrieved 2026-07-11)
- Interspousal transfers and the allowance: Feldman v. Department of Children and Families, 919 So. 2d 512 (Fla. 1st DCA 2005) (the couple’s total resources count at application; the interspousal-transfer exemption in §1396p(c)(2)(B)(i) is capped by the community spouse resource allowance through the supersession clause in §1396r-5(a)(1)); FAC 65A-1.712(4) (resources above the allowance available to the institutionalized spouse at application). Read in full from the official opinion text (retrieved 2026-09-03).
What a Florida Case Shows About Moving Assets to the Spouse at Home
The version of this that lands on my desk is almost always the one that was cheap to set up. A couple downloads a spousal refusal form, moves the savings into the name of the spouse at home, and files the application the same week, because everything they have read says transfers between spouses are penalty-free. The penalty part is true. The part nobody told them is that the count still happens.
Many cases like this keep coming up with a refusal form signed before anyone has counted the couple’s assets against the allowance, and a Florida appellate court decided the clearest one in 2005. A wife was living in a nursing home in south Florida. On February 4, 2004 she signed a form assigning her right of support to the state, and her husband signed a notice of spousal refusal the same day. On March 11 she transferred about $227,000 in shares of stock to him and applied for Medicaid on that same date. Eight days later the two of them signed a second set of forms to replace the first. The Department counted the stock as hers, found the couple over the allowance, and denied the application. A hearing officer agreed, and in December 2005 the First District Court of Appeal affirmed, with rehearing denied in February 2006, two years after the first form was signed. The court’s reason was that if a couple could move any amount between spouses and then refuse, the allowance Congress wrote for the spouse at home would mean nothing, so the couple’s total counts on the application date whichever spouse holds it.
In reading that decision against the rules Florida applies today, I have a few take-home points.
The first is the count. The allowance is a ceiling on what the spouse at home keeps, not a door that assets walk through by changing names. Florida measures the couple’s total on the day of the application, the spouse at home keeps $162,660 of it, and the applicant keeps $2,000. Everything above those two numbers is what I call the problem money, and the problem money is still there after a transfer between spouses. Practice pointer. Before any form is signed, I add up everything both spouses own in any name and subtract $164,660, because that difference is the whole planning job, and a refusal letter does not change it.
Second, the refusal is an income and cooperation tool. The form is recognized in Florida, a later Florida court has approved the mechanics of signing one, and the state keeps the right to pursue support afterward. What the form protects is the income of the spouse at home and their freedom from the state’s questions about their own accounts. Practice pointer. I use the refusal where the spouse at home has their own income and resources to protect, and I never use it as the way to deal with assets above the allowance, because that is the exact use the court rejected.
Third, the sequence cost that couple two years. The transfer, the application, and the second set of forms all happened inside five weeks, and the appeal ran from a hearing officer to a district court of appeal and back through a rehearing motion. Practice pointer. Married Medicaid planning is a sequence, and the sequence is count, convert, then apply, with the refusal added only where it earns its place. Avoid a spousal refusal signed before the couple’s assets have been counted against the allowance, because in that case the form did nothing for the assets, and the transfer it was meant to protect was counted anyway.
What the right plan would have done for that couple is arithmetic. The opinion does not give their total, only that it was above the allowance. A couple holding that $227,000 today keeps $162,660 under the allowance, and the remaining $64,340 is the money a Medicaid-compliant annuity converts into monthly income payable to the spouse at home, with no penalty, no refusal form, and no appeal. I quote crisis planning for a married couple at the consult once the numbers are on the table, the refusal letter is a flat $500 where it fits, and the consult itself is free.
Two limits apply to what that case can tell you. The court decided it under the older method of computing the allowance, half of the couple’s assets at the first day of institutional care with a floor and a ceiling, and Florida now applies the flat $162,660 maximum measured at the application date, so the numbers in the opinion are not today’s numbers. The rule the court applied, that the couple’s total counts and the allowance is the limit on what a transfer between spouses protects, is the rule the Department applies today, and I have not found a later Florida appellate decision that revisits it.
Kevin D. Klagge, Esq., admitted in Florida since 2012. The case described above is a decision of a Florida court rather than a matter handled by this firm. Past results do not guarantee a similar outcome.
Updated on September 3, 2026. Reviewed by Kevin D. Klagge, Esq., Fla. Bar No. 99502. Attorney Kevin Klagge represents families, businesses, and international clients in estate and tax planning, business structuring, and international law, with a focus on Florida legal tools. He litigates estate and business issues in court. General information about Florida law, not legal advice, and no attorney-client relationship is created. Eligibility figures change periodically and outcomes depend on your facts; past results do not guarantee a similar outcome. Advertised fees are honored for 90 days from the date above; government costs are additional and passed through at cost. Do not send confidential information until we have agreed to represent you.