One of the most common and devastating misconceptions about elder law estate planning is that it is too late to save money from nursing home costs. On the contrary, there are crisis planning tools that may save substantial assets from being spent on nursing home costs, even after the client has already entered the nursing home. Almost always, if there are assets left, much can be saved.
There are only three ways to pay for nursing home costs – your own assets, long-term care insurance (owned by less than five percent of the population), or Medicaid provided by the government.
Many people know about the “five-year look-back period” and assume nothing can be done without advance planning. The five-year look-back rule means that if you gave any gifts away within the last five years, when asking for Medicaid to pay for nursing home costs, the gift amount creates a penalty period, which results in a period of ineligibility for Medicaid coverage.