Long Form How to Protect Your Assets From Nursing Home Costs Before It Is Too Late to Do Anything Ab
LEGACY INVESTMENT SERVICES
YouTube Long Form Script | June 2025 | Week 3 - Long Form B
VIDEO TITLE: How to Protect Your Assets From Nursing Home Costs Before It Is Too Late to Do Anything About It
ADVISOR: Jordan Cassiani
TARGET RUNTIME: 14-16 minutes
FORMAT: On-camera advisor, screen share for calculations/visuals
CTA: Link in bio for complimentary retirement income analysis
Securities and advisory services offered through Osaic Wealth, Inc., member FINRA/SIPC. Legacy Investment Services and Osaic Wealth are separate entities. Content is for educational purposes only. Not investment, tax, or legal advice. All scenarios are hypothetical illustrations. Investing involves risk including possible loss of principal.
The most common way a comfortable retirement gets completely derailed is not a market crash. It is a long-term care event. One spouse requires memory care for four years. The other spouse is still living independently and spending normally. At $10,000 to $14,000 per month for a quality memory care facility, four years of care can cost $480,000 to $672,000, and that is before the surviving spouse has had to pay a single dollar of their own expenses.
I'm Jordan Cassiani with Legacy Investment Services. Today we are going to talk about this risk in a very specific and practical way: what nursing home and long-term care costs actually look like, how Medicaid works and what it requires from you before you qualify, the planning strategies that can protect assets, and why the window to do this planning is much earlier than most people think.
What Long-Term Care Actually Costs in 2025
The numbers here are significant enough to pay attention to carefully. A private room in a skilled nursing facility in 2025 runs approximately $9,000 to $12,000 per month nationally, with substantial variation by region. A memory care facility specifically for Alzheimer's and dementia care tends to run at the higher end of that range and often higher in major metro areas. Assisted living is somewhat less, typically $4,000 to $7,000 per month depending on the level of care needed and the location.
According to Department of Health and Human Services data, roughly 70% of people who reach age 65 will need some form of long-term care during their lifetime. The average duration of a long-term care need is about 2.5 years, but around 20% of people will need more than five years of care. Five years at $10,000 per month is $600,000. That is a number that wipes out most retirement savings entirely.
Medicare does not cover this. Medicare covers short-term skilled nursing care following a qualifying hospital stay, typically up to 100 days and only if you are receiving skilled medical treatment, not just custodial care. The moment you no longer need skilled medical care and you simply need help with daily activities like eating, bathing, and dressing, Medicare stops paying. That transition happens faster than most families expect.
How Medicaid Actually Works
Medicaid is the government program that does cover long-term custodial care, but it requires you to meet strict asset limits before you qualify. For a single individual, most states require you to have spent down your assets to approximately $2,000 before Medicaid begins paying. For a married couple where one spouse needs care, the community spouse, meaning the one still living at home, is allowed to retain some assets, typically somewhere between $30,000 and $130,000 depending on the state, plus the primary home and a vehicle.
What this means practically is that a couple who worked for 40 years and saved $700,000 may be required to spend most of that savings on care before the government covers the cost. The spouse remaining at home may end up in a financially precarious position with limited assets to fund their own remaining years.
This is not a problem for people who have very little. This is a problem for people who have something meaningful to lose.
The Five-Year Lookback Rule
Here is the rule that most people discover too late. When you apply for Medicaid to cover long-term care, the government looks back five years at every financial transaction you made. If you gave money to your children, made charitable gifts, or transferred assets in any way during that five-year window, Medicaid treats those transfers as improper and imposes a penalty period during which you are disqualified from coverage.
The penalty period is calculated by dividing the amount transferred by the average monthly cost of care in your state. If you transferred $100,000 and the average monthly cost in your state is $8,000, the penalty period is approximately 12.5 months. During those 12.5 months, you receive no Medicaid coverage even if you are otherwise eligible and in desperate need of care.
This is why last-minute planning does not work. The family that waits until mom needs a nursing home to start thinking about asset protection discovers that every transfer they make now starts a new five-year clock. The right time to do this planning is five or more years before you think you might need care.
The Irrevocable Medicaid Asset Protection Trust
One of the most commonly used strategies for protecting assets from Medicaid spend-down is an irrevocable Medicaid asset protection trust, sometimes called a MAPT. You transfer assets into this trust, and those assets are no longer counted as yours for Medicaid eligibility purposes, but only after the five-year lookback period has passed.
The key word in that sentence is irrevocable. Once assets are in this trust, you cannot take them back. You cannot change your mind and cash it out. You typically retain the right to live in a home placed in the trust and may receive income from assets in the trust, but the principal itself is protected and out of your control. For most people, this is a significant psychological hurdle. The trade-off is that after five years, those assets are sheltered from Medicaid spend-down requirements.
This strategy works best for families who have meaningful assets, who are in good enough health that a five-year window of protection is realistic, and who have done this planning well before a care event occurs. Setting up a MAPT at age 65 when you are healthy is a fundamentally different conversation than trying to do it at 79 when you have already been diagnosed with a progressive condition.
Long-Term Care Insurance and Hybrid Policies
Traditional long-term care insurance was the primary planning tool for this risk for decades. You pay a premium each year and if you need care, the policy pays benefits up to a daily or monthly limit for a set benefit period. The problem with traditional long-term care insurance is that premiums are not fixed. Insurers have raised premiums significantly over the years as the actual cost of claims exceeded projections, and many people have faced difficult decisions about whether to continue paying significantly higher premiums or drop policies they spent years paying into.
Hybrid policies, which combine life insurance or annuities with long-term care benefits, have become increasingly popular as a response to this problem. In a hybrid policy, you make a lump sum premium payment or a series of payments, and the policy provides a death benefit plus an accelerated long-term care benefit. If you need care, you draw down the death benefit to pay for it. If you never need care, your heirs receive the remaining death benefit. Unlike traditional long-term care insurance, the premiums are typically guaranteed not to increase, and you are not paying indefinitely for something you may never use.
The right choice between traditional long-term care insurance, a hybrid policy, self-insuring with a dedicated reserve of assets, or Medicaid planning depends on your age, your health, your assets, and your family situation. There is no single right answer, which is why this conversation is worth having with someone who can model the numbers for your specific scenario.
The Call to Action
Long-term care planning is one of the most important and most consistently postponed conversations in retirement planning. The window to do it effectively is earlier than most people realize, and the cost of waiting can be catastrophic.
If you want to talk through what this risk looks like in the context of your overall retirement plan and what strategies might make sense for your situation, book a complimentary retirement income analysis through the link in my bio. This is a conversation worth having now, not after a health event forces it. I'm Jordan Cassiani with Legacy Investment Services.
PRODUCTION NOTES
This is a high-stakes topic and the tone should be serious but not fearful. Warm, direct, and specific. The cost numbers in the opening are the hook. On screen visual showing the Medicaid spend-down calculation would help illustrate the practical impact. Thumbnail concept: '$600,000 GONE' with a concerned expression, or 'Nursing Home Costs: What Nobody Tells You'. Strong SEO potential on 'how to protect assets from nursing home' and 'Medicaid planning'. Mid-video CTA after the five-year lookback section.
Legacy Investment Services | Jordan Cassiani | Week 3 Long Form B - Long-Term Care and Asset Protection