Nursing home care is often costly and can eat away at your aging mother’s life savings. With careful planning, did you know there are programs that may alleviate the cost, and there are financial planning strategies that can protect the bulk of her savings? It can be important to start planning early. Ideally, you would have at least five years to plan before nursing home care is needed. Even if you do not have that much time, it may not be too late to protect some of her assets. Let us review some steps you can take to prevent Mom from losing her life savings to a nursing home wherever you are in the journey.

One of the most helpful things you can do when helping Mom preserve her life savings may be to start planning for the future at least 5 years in advance of when she may need nursing home care. The reason is that Medicaid has a 5-year or 60-month lookback rule that means that any assets or income Mom had in the last 5 years will be counted against her for Medicaid eligibility. If you have 5 years or more, you can maximize an asset protection trust planning strategy. An elder law attorney can work to take protective measures such as placing Mom’s assets into an irrevocable trust, so they are removed from consideration for Medicaid eligibility. If Mom becomes eligible for Medicaid as a result, Medicaid will pick up the tab for nursing home care.

Medicaid will cover nursing home costs for qualified individuals for as long as they need it, but the program can require you to spend down your savings prior to qualifying. As we explained above, Medicaid looks at your assets, income, and expenses over the past 5 years to make an eligibility determination. If you have less than 5 years before Mom needs nursing home care, it may not be too late to protect at least some of her savings. You can put assets into trust now, and they will only show for part of the 5-year period prior to entering a nursing home, which can limit the damage. The more time you have, the more you can do.

For more information about Medicaid planning and covering the cost of long-term care, please reach out to our office to schedule an appointment. We do telephone, computer, and face-to-face appointments. Our face-to-face appointments are held outside in the open air (frequently selected by clients for document signing) and inside our office conference room. We follow all CDC guidelines. Our office procedures adhere to COVID-19 safety protocols and are designed and enhanced by medical review and air quality engineering.