How to Protect Your Assets from Nursing Home Costs

The costs of nursing home care can quickly deplete an individual’s life savings. However, several strategies can be used to protect your assets while still ensuring you or your loved ones receive necessary long-term care.

Long-Term Care Insurance: This type of insurance policy can help cover the cost of nursing homes, assisted living facilities, and in-home care. It’s most cost-effective when purchased at a younger age and in good health. While it can be a significant investment, it can also provide peace of mind and financial security.

Medicaid Planning: Medicaid (known as Medi-Cal in California, a federal and state program, can cover long-term care costs for those with limited assets and income. However, eligibility rules are complex. It’s often beneficial to work with an elder law attorney to properly structure your assets and income, ensuring you qualify without unnecessarily depleting your resources.

Irrevocable Trusts: Assets placed in an irrevocable trust are generally not considered countable assets for Medicaid/Medi-Cal eligibility. Essentially, you gift your assets to the trust, and a trustee manages them. But be aware, there’s a “look-back” period, meaning asset transfers within a certain time before applying for Medicaid/Medi-Cal may still be considered.

In conclusion, protecting your assets from nursing home costs involves careful planning and understanding of both insurance and estate law. Each person’s situation is unique, so it’s advisable to consult with a financial advisor or elder law attorney to choose the best strategy for your circumstances. Remember, the best time to plan for potential long-term care costs is well before you need it.

It is critical to work closely with an experienced and qualified elder law attorney who regularly handle Medi-Cal planning to ensure you take all the steps necessary to protect your assets from rising nursing home costs. This will help put your mind at ease.

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Timothy P. Murphy

Timothy P. Murphy is an estate planning and elder law attorney whose practice emphasizes helping people to build, preserve and pass on their wealth. He works with his clients to accomplish their goals while avoiding unnecessary court proceedings and minimizing or eliminating exposure to death taxes.

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