Smart Strategies to Protect Assets from the High Cost of Nursing Homes and Long-Term Care
- Kathy L. McNair, Esq.
- 4 days ago
- 3 min read
As an elder law attorney in Massachusetts, I help families protect assets from the high cost of nursing home and long-term care. Changes to MassHealth regulations are making it more difficult to qualify for this program and to protect assets. It is becoming more important than ever to plan in advance.
Many families are unprepared for the emotional and financial toll of extended care. With long-term care costs often exceeding $200,000 per year in Massachusetts, a coordinated strategy combining advanced legal planning with long-term care insurance may provide the strongest protection for those who can afford it.
This approach is not just about preserving assets; it is about preserving options, independence, and peace of mind.
Why Combine Long-Term Care Insurance with Legal Planning?
Long-term care insurance helps pay for care when someone needs assistance with daily activities, either at home or in a facility. Legal planning helps protect assets, ensure eligibility for programs like MassHealth, and establish clear decision-making authority through documents such as powers of attorney and health care proxies.
Each strategy has its strengths and limitations. When used together, they can provide a more comprehensive safety net. Insurance can cover costs in the early stages of care, while legal planning prepares for the possibility of needing public benefits or nursing home care in the future.
The Best Time to Consider Long-Term Care Insurance
The best time to purchase long-term care insurance is typically between the mid-50s and early 60s. At this stage, premiums are more affordable, and most individuals are still healthy enough to qualify for coverage.
Waiting too long can result in higher premiums or disqualification due to health conditions. It is also important to review the fine print. Some policies have elimination periods of up to 1 year, meaning the policy will not pay for the first 12 months of care. Others lack inflation protection, which can severely limit the policy’s usefulness over time.
When to Begin Advanced Legal Planning
All adults should have at a minimum a Will, Health Care Proxy, and Power of Attorney document. Those who want to protect assets from a nursing home or from the high cost of long-term care often want to consider advanced legal planning. The best time to consider this in your 60s to early 70s, well before a crisis occurs. For individuals with chronic illness or a family history of conditions such as Alzheimer’s disease, it may be wise to begin even earlier.
Planning tools may include irrevocable trusts to protect assets, updated powers of attorney, and health care proxies. These tools can help ensure that a person’s wishes are respected and that assets are preserved in the event that long-term care becomes necessary.
It is important to remember that MassHealth has a five-year look-back period for most asset transfers, so planning must be done well in advance of applying for benefits.
Who Benefits Most from This Strategy?
This combined approach is best suited for individuals who:
Have the resources to afford long-term care insurance premiums, even in retirement,
Do not have enough wealth to fully self-insure against years of care expenses,
Want to preserve their estate for heirs, and
Value having options and flexibility in how and where they receive care.
This is not a strategy for everyone. For those with very limited income and resources, MassHealth planning may be the only realistic option. But for individuals in the middle to upper asset range, combining insurance with legal planning can create a stronger, more flexible plan.
Be Careful with Policy Details
Some policies can unintentionally cause problems. For example, individuals with low incomes may discover that having a long-term care insurance policy disqualifies them from certain MassHealth programs they could have otherwise accessed. This makes it essential to review all policy terms with both an elder law attorney and an experienced insurance professional before purchasing.
Conclusion
Advanced legal planning and long-term care insurance are powerful tools, but only when used thoughtfully and in coordination. Starting early is key. By planning ahead, you can help ensure that your wishes are followed, your assets are protected, and your care options remain open.
If you are considering either strategy, or both, the time to act is before you need care. Contact our office to schedule a consultation and discuss how to create a plan that works for you and your family.
Senior Solutions, Attorneys at Law, is an Estate Planning and Elder Law firm serving the Greater Boston, Massachusetts area since 2001. We are ready to help you with Medicaid Planning, Estate Planning, Probate, Guardianship & Conservatorships, Special Needs Trusts, and Fiduciary Services. We are here to help. Please call our office at 617-489-5900 or schedule a brief consultation (offered to new clients) by clicking the button below:
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