As our loved ones age, many families are faced with a difficult but necessary question: How can we ensure our parents receive the long-term care they need without losing everything they’ve worked for?
With nursing home costs continuing to rise—often reaching $250 to $300 per day or more — families may quickly find themselves depleting savings to cover ongoing care. Unfortunately, private insurance typically doesn’t cover long-term care, and while long-term care insurance can help, it’s expensive and may fall short during extended stays.
This is where Medicaid becomes an essential option — but qualifying without first spending down nearly all of your assets requires early, strategic planning.
The Growing Need for Long-Term Care
Nearly 70% of Americans who reach age 65 will need some form of long-term care, and about 40% will spend time in a nursing home. While many associate this type of care with older adults, Medicaid expansion has also increased access for younger individuals, shifting demographics within nursing facilities.
Yet, despite its critical role, Medicaid has strict financial eligibility requirements. Fortunately, there are planning strategies that can help preserve your savings while meeting care needs.
Strategies That Can Help Protect Family Assets
Here are a few of the most effective Medicaid planning tools available:
- Medicaid-Compliant Annuities (MCAs): These convert countable assets into non-countable, which may help meet Medicaid’s financial criteria while preserving value.
- Medicaid Asset Protection Trusts (MAPTs): Assets placed into these trusts are no longer counted for Medicaid purposes, but timing is key — they must be established well in advance of care needs due to the five-year lookback rule.
- Promissory Notes: In some states, a legally binding loan to a family member can help convert assets into income. The terms must meet specific requirements to be Medicaid-compliant.
- Transfer on Death Deeds: The right type of deed can ensure your home transfers to your beneficiary immediately upon your passing, while you retain a right to live there during your lifetime. This can help protect the property from Medicaid Estate Recovery.
- Smart Spend Down: Using funds on allowable expenses — such as home improvements, medical equipment, prepaid burial arrangements, or even a reliable vehicle — can improve quality of life while helping meet Medicaid thresholds. However, you need advice on WHEN to start these expenditures so that they actually “count” toward your spend down!
If only one spouse requires nursing home care, the “community spouse” may be able to retain a significant portion of income and assets, further protecting the household.
Every Family’s Plan Should Be Unique
There’s no one-size-fits-all approach when it comes to Medicaid planning. Each family’s situation is different — and every detail matters. From state-specific rules to the unique needs of your family, careful legal guidance can make all the difference.
We help families navigate these complex issues with compassion, clarity, and a deep understanding of how to preserve what matters most.
If you’re ready to begin planning or have questions about how to protect your parents’ assets, reach out to us today for a consultation.
