Protecting Your Assets From Nursing Home CostsProtecting Your Assets From Nursing Home Costs

Most seniors will need long-term care – almost 70% of people 65 and up can count on needing it at some point Everyone understands on some level that it’s expensive, but many families don’t sit down to do the math to figure out the actual numbers they should expect to pay and create a plan to make sure they can afford it. Or often when they do, it’s when a loved one already needs long-term care and it’s too late to make the smartest decisions about it.

That ends up meaning that many families turn to the assets and savings seniors had hoped to pass on to their children in order to cover the costs. With the help of some early planning and some smart financial moves, seniors can save some of those assets in spite of the high costs of nursing homes. No one step is the magic formula that will make a nursing home easy to afford, but each of these five suggestions could help your family retain more of your financial assets in spite of the costs of long-term care.

1. Talk to a financial planner.

This is very important. A lot of complicated factors go into paying for long-term care. What you can get from long-term care insurance is influenced by how early you buy a policy, what your policy is, and what nursing home you choose, amongst other factors. What you can get from Medicaid has to do with the amount of money and assets you have, what form they take, and whether or not the person needing long-term care is married and if the spouse is still living.

A financial planner can help talk your family through all the complicated legal and bureaucratic issues around covering the costs of a nursing home. The sooner you sit down with one, the more time you have to devote to a long-term plan that will help your family retain as much as possible.

2. Get long-term care insurance early.

Experts recommend your mid-50s as the best time to invest in long-term care insurance. Getting it while you’re still relatively young and healthy means you’re more likely to qualify and get lower premiums. If your loved one missed the boat on getting a policy at that age, it’s still a good idea to check and see if they can still qualify.

3. Start giving away assets in advance.

If your loved one already has a plan for who will be inheriting their assets, they can start bequeathing assets to their family members early. This step can get tricky, because in order for the gift not to be counted against a senior in Medicaid calculations, it needs to be given five years before they need nursing home care.

Most people can’t predict five years in advance when they’ll need long-term care, so this is another good reason to start your family’s financial planning early. If the family member most likely to need long-term care first trusts family members to take care of their financial needs when the time comes, giving the home and other financial assets to their children well in advance of their time of need is a smart move.

4. Use your assets.

Another way you can potentially get more from Medicaid to cover your long-term care costs is to use your assets for things that are of value to you, but that diminish the amount that’s considered by the government in their Medicaid calculations. If you have debts you can pay down or home improvements you’ve been considering, paying for them before you head to long-term care can potentially save you money in the long run.

5. Choose the right nursing home.

If you choose a nursing home that’s affordable and accepts both Medicaid and your insurance, your costs will come out much lower in the long haul. Do keep in mind quality of life – you don’t want to choose affordability at the cost of your loved one’s final years being unpleasant. But do consider the balance between the costs and what your loved one most wants and needs in a nursing home.

Every family wants to make sure that family members are taken care of financially, but not at the risk of cheating the system or incurring penalties. Some of these steps need to be taken carefully to ensure you stay on the right side of the law.  Talk to a financial planner or lawyer to make sure that any strategy you use to protect your assets is legal and acceptable. With the help of a professional, your family can retain as much of its financial health as possible.  

Kristen Hicks is an Austin-based copywriter and lifelong student with an ongoing curiousity to learn and explore new things. She turns that interest to researching and exploring subjects helpful to seniors and their families for


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