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How to Protect Your Assets from Nursing Home Costs

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March 2, 2022 Long Term Care

Paying for long-term nursing home care can drain anyone’s nest egg but is it a necessary evil in order to receive the care you need? No. There are options out there to help pay for care without going broke - and we can help you explore them.

If you have the time to plan ahead and are in good health, we recommend using an Irrevocable trust or Long-Term Care insurance. However, if you require care immediately and are looking to protect your assets now, we recommend paying off debts or using a Medicaid Compliant Annuity.

If You Have Time to Plan Ahead

Irrevocable Trust

An irrevocable trust is a trust that cannot be changed or terminated once created. All assets put into this kind of trust are also no longer owned by that individual and you must name a trustee.

A general irrevocable trust will create a trust funded by a variety of assets and while the nursing home may not be able to get ahold of those funds, other agencies may so you want to know who will be paying for care before you complete this trust.

A specific type of irrevocable trust can be created specifically for funeral expenses. A Funeral Expense Trust not only helps spend down your assets, but it also sets aside funds for end-of-life costs. A Funeral Expense Trust can also provide peace of mind to your loved ones who may have otherwise had to make those decisions in an already difficult time. 

Long-Term Care Insurance

Long-term care insurance costs have gone up over the years but it covers many long-term care options like nursing home, assisted living, or home health care. The price of long-term care has also continued to go up so if you’re able to plan out far enough ahead, long-term care insurance costs will actually be less than what the potential cost of a nursing home or assisted living facility will be.

Long-term care insurance is best for those who:

  • Are able to pre-plan for care
  • Want to protect their assets
  • Want to create a legacy
  • Want to avoid probate

Find out which strategy works best for you by using our free planning wizard which will outline your planning options within minutes!

Learn More: The Different Types of Long-Term Care Insurance

If You Need Care Immediately

Pay Off Debt

Paying off any debts you have, whether that be a mortgage or a vehicle or credit card debt, will not count against you if the nursing home looks at your financial records. In addition, it will lower the number of countable assets you have to use to pay for your nursing home care and will bring you closer to the financial Medicaid eligibility requirements. 

Medicaid Compliant Annuities

A Medicaid Compliant Annuity is a unique and effective tool used to protect your assets from nursing home costs. If your loved one requires care immediately, they may be able to protect liquid assets by purchasing a Medicaid Compliant Annuity.

This innovative product helps you shift items from the asset column into the income column in order to help you qualify for benefits. Once you are within Medicaid limits, Medicaid will subsidize the cost of care, and any at-risk assets are considered protected.

A Medicaid Compliant Annuity can help you:

  • Reduce assisted living or nursing home costs
  • Accelerate Medicaid benefits for your loved one
  • Spend down excess countable assets
  • Preserve your loved one's nest egg


Read More: Medicaid Compliant Annuity - How to Become Medicaid Eligible


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