When John turned 72, he was still mowing his lawn, golfing twice a week, and swearing he’d “never end up in a nursing home.” Then he fell. Suddenly, his family was scrambling to pay for care. Like many, they discovered the hard way that Medicare doesn’t cover long-term care, and nursing home bills can drain savings faster than you can say “fore!”
John’s story isn’t unusual. The reality: 70% of people over 65 will need some form of long-term care. About 40% will spend time in a nursing home. With the average stay topping $150,000, planning isn’t optional. It’s survival.
Why Planning Early Matters
Waiting until a crisis hits leaves you with bad options and empty wallets. Plan a few years ahead and you can protect more of what you’ve worked for.
A few facts:
- The average nursing home stay is about 16 months.
- Medicare only covers short-term rehab, not long-term care.
- Medicaid does cover long-term care, but with strict rules on income, assets, and transfers.
What Medicaid Counts (and Doesn’t Count)
To qualify for Medicaid, a single person usually can’t have more than $2,000 in countable assets like cash, savings, or retirement accounts.
Some things don’t count, like:
- Your primary home (in most cases)
- One vehicle
- Personal items and household furniture
The catch? Medicaid has a five-year look-back rule. If you gave away money or property in the past five years, you could be penalized. Translation: plan ahead or pay the price.
Medicaid Planning Strategies
The right strategy depends on your situation, but here are some of the tools we use:
- Medicaid-Compliant Annuities to turn assets into income in crisis cases
- Medicaid Asset Protection Trusts created more than five years before applying
- Promissory Notes to loan money to family while receiving repayment
- Lady Bird Deeds to protect your home from recovery after death
- Smart Spending on things like debt payoff, home improvements, a reliable car, prepaid funeral expenses, or even a family trip
If one spouse needs nursing care, Medicaid rules also allow the healthy spouse to keep more income and assets. This can make a big difference in protecting your family’s financial security.
Don’t Wait to Get Help
Medicaid planning is complicated. One mistake can cost tens of thousands. The sooner you start, the more options you’ll have to protect assets and secure care.
At Rosenberg Law Firm, we guide families through Medicaid and long-term care planning every day. Whether you’re preparing ahead or already facing a crisis, we can help. Request a Consultation or Register for a Workshop and protect your future before the choice is taken out of your hands.