Planning for Snowbirds

Planning for Snowbirds

For retirees who move to Florida or other warmer climes, planning ahead in case long-term care is needed is just as important as for those who stay. Even though it is my experience that if retirees need significant homecare help or a nursing home, they usually return to where their children live, as that is their support group. There are additional matters to consider as a result, because planning must take account of differences in the laws of both states.

One difference is that standard documents such as a power of attorney or a living  will might have more or fewer powers or at least different formats. In general, they should be valid anywhere in the U.S., but sometimes financial institutions can be difficult to deal with if the format of the power of attorney is not what they are used to seeing. To avoid potential difficulties, it may make sense to do a similar power of attorney or living will in both states, but over the years no family has been unable to use their home state power of attorney.

A more complicated difference can arise due to the state specific tax laws. For example, in Florida, residents for more than six months in each calendar year can receive a “homestead exemption” on their real estate taxes. What happens is the annual real estate taxes do not increase as long as the homestead exemption is maintained. So, if your neighbor in Florida has exactly the same house, and he is a resident, with the homestead exemption his taxes will not increase, but your taxes may increase each year. In that scenario, one neighbor could end up paying drastically different taxes for identical properties. The lesson of that is to make sure the requirements of the state tax laws are met if you can qualify.

Planning with trusts to protect assets in case Medicaid is needed to pay for care is more complicated, although the national rule, in all 50 states, is that it takes five years before assets are protected. That part is consistent between the states. Using Florida again as an example, to make sure the homestead exemption can be kept, Florida attorneys may recommend that either a life use be retained by the owner, or that a 99-year lease be signed between the owner and their trust. In Connecticut we do not have a homestead exemption, so that is not a concern.

A significant planning consideration is how much homecare is paid for by a state, either from its own programs or Medicaid. States vary a great deal in how much they pay for in homecare, and Connecticut has better homecare programs than many states. At the start, my observation was that people return to where their children live, if significant long term care is needed, so the word to the wise is to make sure whatever planning you do will work both here in Connecticut as well as well as in another state that may only be for temporary retirement during good health.
Attorneys Stephen O. and Halley C. Allaire are partners in the law firm of Allaire Elder Law.
Attorneys Stephen O. and Halley C. Allaire are members of the National Academy of Elder Law. Attorneys, Inc.
Allaire Elder Law is a highly respected, and highly rated law firm with offices in Bristol, CT.
We can be contacted by phone at (860) 259-1500 or by email.

If you have a question, send a written note to us and we may use your question in a future column.

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