Executive Summary:
Nursing home care is one of the most expensive forms of long-term care, and the risk of needing it increases with age. But that doesn’t mean you have to lose your home or spend down everything to qualify for Medicaid. Federal and state laws allow you to keep certain assets, especially your home, if your plan is built correctly. Don’t wait for a crisis. Make sure your assets are protected without giving up ownership or control.
No one wakes up hoping to go into a nursing home. It’s not a choice people plan for the way they do vacations or retirement communities. But the reality is that nursing homes serve an important purpose. They provide skilled care for people who can no longer perform basic activities of daily living on their own. And while few people want to talk about it, many families end up facing this situation.
The Cost of Skilled Care
Nursing homes offer one of the highest levels of long-term care. Because of the level of services involved, they’re also one of the most expensive. According to the 2023 Genworth Cost of Care Survey, the median monthly cost of a private room in a nursing home is over $9,500 nationally, and it can be even higher in Georgia. These costs can quickly deplete a family’s savings.
Even a short stay can be financially draining. And while the average length of stay has decreased in recent years, largely due to the rise of assisted living and memory care facilities, many people still spend months or even years in a nursing home. In fact, AARP reports that about 70% of people over age 65 will need some form of long-term care in their lifetime.
When Long-Term Care Is No Longer Optional
The need for nursing home care often begins with something ordinary: a fall, a stroke, or a sudden decline in health. And while younger people often recover more quickly, older adults may face longer recoveries or permanent declines. A broken hip at 40 might mean physical therapy. At 80, it could mean permanent nursing care.
That’s why conversations around long-term care planning can’t wait. If you or your spouse ever need this level of care, the best time to plan is before a crisis, not when you’re already at the hospital or in a care facility. Planning ahead can mean the difference between protecting your assets or losing them to monthly nursing home bills.
You Don’t Have to Lose Everything
A common myth we hear all the time is: “You can’t get Medicaid if you own anything.” That’s simply not true. Federal and state laws specifically allow you to keep certain assets, even if you receive long-term care through Medicaid.
One of the most important protected assets? Your home.
Under current federal law and Georgia law, a person’s primary residence is protected up to a certain amount of equity. In fact, recent legislation increased that protected equity amount from $750,000 to $1 million. That means if your home is worth $1.5 million but you owe $500,000, the $1 million in equity is protected even if you apply for Medicaid. And it’s not just homes. Certain types of retirement accounts, personal property, and term life insurance policies can also be protected.
Why You Shouldn’t Transfer Your Assets
Some people believe they can avoid long-term care costs by transferring assets to their kids or putting everything in someone else’s name. But this strategy often backfires.
Here’s why: When you transfer an asset, like your home, you give up ownership. And when you give up ownership, you give up control. You can’t use what you don’t own. That means you can’t sell it, refinance it, or live in it without permission. Worse, if your child gets divorced, sued, or faces financial hardship, your former asset could become a target.
On top of that, there’s the Medicaid look-back rule. If you give away assets within five years of applying for Medicaid, you could be penalized and denied coverage for a period of time. That’s why we recommend keeping ownership, but making sure your assets are structured the right way.
Avoiding Probate, Avoiding Mistakes
Another important principle we teach our clients: a will does not avoid probate. You cannot title your home or your accounts in coordination with a will. That’s why we often recommend a revocable living trust. When your home is titled properly through a trust, it avoids probate, stays under your control, and still qualifies for protection under Medicaid.
Proper planning can protect you from unnecessary financial loss. And you don’t have to give away your assets to do it.
If you’re thinking about how to protect your home, your savings, and your peace of mind if long-term care is ever needed, reach out to J. Kevin Tharpe, PC. We’ll help you apply the right legal principles to your unique situation so you don’t just get a document, you get a plan that actually works.
Kevin Tharpe
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