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Three Ways to Approach Long-Term Care and Nursing Home Costs

As long-term care and nursing home costs have soared to well over six figures annually, it is more important than ever to look at measures you can take to protect your assets.

There are three ways you can approach the exorbitant costs of care:

  • Paying out-of-pocket is certainly the easiest if you can afford to do it, but unless you make a six-figure retirement income, you run the risk of draining your assets severely.
  • Long-Term Care Insurance covers many different types of care and is accepted across state lines, but the number of providers is shrinking and premiums are rising.
  • Medicaid Asset Protection Trusts (MAPTs) help people who own property qualify for Medicaid in the event they need long-term care. They allow people to protect their assets without losing them.

Medicaid Asset Protection Trusts (MAPTS)

The last strategy is the most valuable to many of our clients.

The MAPT is a type of irrevocable trust. The trust’s grantor (creator) cannot also manage the trust as its trustee. This role is usually delegated to an adult child or another responsible party.

Also, though the trust’s grantor can live in the property and enjoy income from the trust, he or she cannot cash out and spend the trust principal. While this is unsettling for some, the benefits usually outweigh initial concerns, and there is far more flexibility than the term “irrevocable trust” suggests.

The grantor can change beneficiaries and trustees, claim STAR and other property tax exemptions, sell real property, and continue to live normally. Under New York State law, there is a path to revoking an irrevocable trust, should life circumstances change.

Medicaid Eligibility

When someone divests their assets or makes a trust for the purpose of Medicaid planning, there is a waiting period of five years before they qualify to get Medicaid to cover their nursing home care. For example, someone who made a trust on July 31, 2017 will be eligible on August 1, 2022. When a nursing home patient applies for Medicaid, they are required to produce bank statements and other financial records going back 60 months. If these records show transfers to trusts or other entities, it will limit or sometimes eliminate their Medicaid eligibility.

Community Medicaid

There is hope for those of advanced age or declining health. Community Medicaid (care in the home) does not have the same look-back period, and it can be sought out immediately when acquired. If a loved one is in need of nursing home care right away and there is no chance of passing through a look-back period, there are still strategies that elder law attorneys can use to protect a portion of the assets.

No one who consults an attorney has to go broke because they get sick.

Contact us today. We are here to talk to you, answer your questions, and give you the counsel that you need!


Michael Wagner is an associate concentrating in elder law and estate planning.  He can be reached by phone at 866-303-9595 toll free or 845-764-9656 and by email.

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