How to Protect Assets from Nursing Homes
It’s difficult to know ahead of time if long-term care is in your future, but many older adults need this type of care at some point in their life. That may be round-the-clock care in a nursing home or assistance with daily tasks and care at home.
Skilled nursing facilities, or nursing homes, care for those who need constant nursing, therapy, and non-medical care. When you need care, the cost can be overwhelming, especially for families with a low or medium income. Medicaid, or MassHealth in Massachusetts, is a government health insurance option that can help take certain expenses off you if you’re qualified. However, this coverage has strict asset and income guidelines, and without help, it’s easy to be disqualified.
The cost of long-term care can be high and in a short time, it can drain your accounts without the proper plan in place. There are many strategies for safeguarding your assets, and a trusted lawyer like Matthew Karr, Esq., can guide you through your options.
Unsure how to protect your assets so you can qualify for MassHealth Standard coverage for long-term care in case you ever need care from a nursing home? Our attorney at The Heritage Law Center can review those options with you and help you plan for the future. If you’re concerned about protecting your assets, reach out for the guidance you need.
How to Protect Your Parents’ Assets from a Nursing Home
Adult children often contact the Heritage Law Center when a parent’s health is declining and the family is suddenly facing the reality of nursing home costs. If you’re trying to protect a parent’s home, savings, or other assets from being spent down on long-term care, the most important thing to know is this: planning done early is far more effective than crisis planning. Massachusetts has strict MassHealth asset and income limits, and the state reviews five years of financial history when you apply. The strategies that work best Medicaid Trusts, life estates, and careful gifting all require time to be effective. Matthew Karr, Esq., at the Heritage Law Center helps families across Massachusetts put these protections in place before a crisis forces difficult decisions.
A Medicaid Trust Can Protect Your Assets
A Medicaid Trust is an Irrevocable Trust that can protect your assets from being counted for Medicaid eligibility. Once you create the trust, it can’t be changed or revoked. The trust is managed by a third party you name as trustee. As the person who created the trust, you don’t have access to the assets so they are no longer seen as part of your estate.
The Five-Year Lookback: What You Need to Know
One of the most misunderstood aspects of MassHealth planning is the five-year lookback period. If you transfer assets whether to a trust, a family member, or through gifts within five years of applying for MassHealth, those transfers can be penalized. MassHealth may treat those assets as still available to you, delaying your eligibility. This is why “getting rid of assets” right before entering a nursing home rarely works and can make your situation worse. The most effective protection strategies are those started well in advance. If you’re already facing an immediate nursing home situation, crisis Medicaid planning options may still be available contact the Heritage Law Center to discuss your specific circumstances before making any asset transfers.
Protecting Your Home and Savings from MassHealth Estate Recovery
Even if MassHealth covers your nursing home care, Massachusetts may pursue estate recovery — placing a claim against your estate after death to recover costs paid. This means your home, which may be exempt while you are alive, can still be claimed by the state after you pass. Strategies like a properly structured life estate, a Medicaid trust established well before the five-year lookback window, or transferring your home to a trust can help protect your home and savings from both nursing home spend-down and estate recovery. The Heritage Law Center helps Massachusetts families navigate these risks — contact us for a free consultation.
When you apply for MassHealth, they have the right to review your finances for the previous five years. Assets that have been in your Medicaid trust for at least those five years won’t count as your assets for MassHealth eligibility.
Setting up a Medicaid trust allows you to protect assets to pass them down to your loved ones and still qualify for MassHealth coverage. Planning in advance will put you in the best position for coverage should you need long-term care down the line.
Create a Life Estate
A life estate is a deed in which two or more people each have ownership of real property, but they have it for different periods of time. It transfers the future ownership interest in your primary residence to the person(s) you choose while you retain the exclusive right to use the house for the rest of your life. As the original owner, you can live in the house for the remainder of your life without being removed, and without the risk of losing your home during a long-term health care situation.
A life estate allows you to maintain ownership over your residence if you’re admitted to a nursing home because you need long-term care. When you pass away, ownership transfers outside of probate to the person you named on the deed. Taking this step can also help you qualify for MassHealth because it removes a major asset, your house, from your estate.
What Assets Are Protected from Nursing Home Costs in Massachusetts?
Not all assets count against MassHealth eligibility. Certain assets are considered “exempt” or non-countable, including your primary residence (under specific conditions), one vehicle, personal belongings, and pre-paid burial arrangements. However, your home may still be subject to MassHealth estate recovery after your death meaning the state may seek reimbursement from your estate. An LLC does not shield assets from nursing home costs; MassHealth looks through ownership structures to assess what you control. A qualified Elder Law Attorney at the Heritage Law Center can help you identify which of your assets are at risk and which are already protected.
Protecting your assets from a nursing home can be done by designating certain assets now for charity or gifts. Lowering your financial worth by giving cash gifts and purchasing large items can help you use your assets the way you want to use them without losing them to the high costs of long-term care.
However, there are dollar limits and only certain items qualify for these gifts and certain charitable actions. Speaking with an attorney will ensure that you are following the laws without penalty.
For more information on MassHealth planning and asset protection, check out our free report.
Does a Trust Protect Assets from a Nursing Home?
It depends on the type of trust. A revocable living trust does not protect assets from nursing home costs because you retain control over the assets, MassHealth still counts them toward your eligibility. An irrevocable Medicaid trust, by contrast, can protect assets effectively, provided they have been in the trust for at least five years before you apply for MassHealth. An LLC generally does not shield assets from nursing home costs either, as MassHealth looks through ownership structures to assess countable assets. The short answer: irrevocable trusts are the primary legal tool for nursing home asset protection in Massachusetts but timing is everything. The Heritage Law Center can help you determine which strategy fits your situation. Learn more about our asset protection options.
Plan and Protect Your Assets with a Lawyer
When you or a loved one is planning ahead for a possible stay in a nursing home, you may be worried about the drain of medical expenses and scams or abuses that can hurt your family’s financial security. Acting now, before long-term care costs are incurred, can give you or your loved one peace of mind that important assets are being protected.
Matthew Karr, Esq., understands that safeguarding your assets is key. He’s here to use his skills and expertise to help you strategize, complete the right paperwork, and ensure your assets are protected. We offer free consultations and free reports about asset protection as you plan ahead for the possibility that one day you might need a nursing home stay.
Ensure you have the plans in place for the potential need for nursing home care in the future by reaching out for a consultation. Connect with Matthew Karr, Esq., and The Heritage Law Center today by calling 617-299-6976 or completing the online form below to start protecting your assets today
Frequently Asked Questions About Nursing Home Asset Protection
Can a nursing home take your house?
A nursing home cannot directly take your house, but if MassHealth pays for your care, the state may place a claim on your estate including your home after death through estate recovery. A life estate or Medicaid trust can help prevent this.
How do I protect my parents’ assets from nursing home costs?
Start planning early. The most effective strategies Medicaid trusts, life estates, and structured gifting require time to clear MassHealth’s five-year lookback. If a parent’s health is already declining, crisis Medicaid planning options may still be available. Contact Heritage Law Center to discuss your specific situation.
How do I protect my spouse’s assets if they go into a nursing home?
Massachusetts has “community spouse” protections that allow the at-home spouse to retain certain assets and income. Working with an attorney ensures you maximize those protections while pursuing MassHealth eligibility for your spouse.