Protect your assets now, so they can protect you later.

The cost of nursing home care continues to outpace inflation and rise at alarming rates. Unfortunately, in the aftermath of the COVID-19 pandemic, this trend is likely to get worse. Even at current rates, you could end up spending your life savings before you are eligible for Medicaid. At that point, your family may not have the money to pay for important things that Medicaid doesn’t necessarily cover, such as wheelchairs, dentures, hearing aids, special medications, and personal clothing.

Fortunately, there are various planning options that allow you to qualify for Medicaid without spending down all of your assets and leaving you and your family destitute.  . But in order for these options to work, you typically have to do “Medicaid pre-planning” at least 5 years before you need to go to the nursing home and apply for Medicaid. This is because Medicaid has a 5-year “lookback period” that penalizes most asset transfers made within 5 years prior to your application for Medicaid.

Given this 5-year lookback period, it’s critical to start the planning process as soon as possible. Even if you feel confident you won’t need nursing home care in the next 5 years, it’s usually better to get started sooner rather than later. If you wait too long, then you may be forced to rely solely on “Medicaid crisis planning,” which can still save a significant amount of your assets, but not nearly as much as pre-planning may preserve.