The average cost of a semiprivate nursing home room in 2020 in Massachusetts was more than $12,600 per month, and those numbers continue to rise each year. For many families, the expense of long-term care can quickly drain retirement savings and other hard-earned assets. Without planning, it is easy to see how a lifetime of work can be spent on nursing home bills. The good news is that thoughtful estate planning can help protect your assets and prepare you for future care needs.
Why Nursing Home Planning Matters
Most private health insurance policies, as well as Medicare, do not cover long-term nursing home stays. Families often end up paying out of pocket, which may leave little behind for a spouse or children. By putting a plan in place early, you can:
- Preserve savings and property for your loved ones
- Increase the likelihood of qualifying for MassHealth (Medicaid in Massachusetts)
- Reduce the stress of last-minute decisions if care is suddenly needed
Qualifying for MassHealth Benefits
MassHealth is Massachusetts’ Medicaid program, and it pays for long-term nursing home care if you meet the strict financial requirements. To qualify:
- A single applicant must have no more than $2,000 in countable assets
- A married applicant whose spouse remains in the community can keep $157,920 under current rules
Without planning, many people find themselves over the asset limit and ineligible for coverage. Careful use of trusts and other legal tools can make a major difference.
The Five-Year Lookback Rule
One of the most important rules to understand is the five-year lookback period. When you apply for MassHealth, the state reviews your financial history for the previous five years. Transfers or gifts made during this time may trigger penalties, delaying your eligibility and forcing you to pay nursing home costs yourself.
This is why advance planning is so valuable. By preparing well before care is needed, you can transfer assets in ways that protect them while still preserving your ability to qualify for benefits.
Why a Living Trust May Not Be Enough
Revocable living trusts are popular for many estate planning purposes. They allow you to manage and control your assets during life and simplify the transfer process after death. However, when it comes to MassHealth eligibility, a revocable trust will not shield assets. Because you maintain control over the trust property, the state still considers those assets available to you.
This includes funds in bank accounts, retirement savings, and property placed in a revocable trust. Relying on this type of trust alone will not protect you from nursing home costs.
Using an Irrevocable Trust to Protect Assets
An irrevocable trust is often the best option for protecting assets from long-term care expenses. Once assets are placed in an irrevocable trust, you no longer own them directly. Instead, they are managed by the trustee for the benefit of your chosen beneficiaries. Because you surrender control, MassHealth does not count these assets when determining eligibility, so long as the transfer occurred more than five years before applying.
When setting up an irrevocable trust, you will work with your attorney to:
- Choose which assets to include (such as a home, investments, or business interests)
- Name the beneficiaries who will inherit property after your death
- Appoint a trustee to manage the trust in accordance with Massachusetts law
Should You Transfer Your Home Into a Trust?
For many families in Massachusetts, the home is the single most valuable asset. Transferring your residence into an irrevocable trust can shield it from being sold to pay nursing home expenses, while still allowing you to live there for the rest of your life. If the transfer takes place more than five years before applying for MassHealth, the home will generally be excluded from eligibility calculations.
This strategy can help ensure your home passes to your children or other beneficiaries, rather than being lost to nursing home bills.
Emergency Planning for Nursing Home Care
Ideally, you will plan well in advance of needing care. However, we understand that life does not always unfold on a perfect timeline. If you or a loved one needs nursing home services immediately, we can help with emergency MassHealth planning. Even if you are currently over the asset limit, there may be legal strategies available to reduce your countable assets, increase your chances of approval, and protect as much as possible for your family.
Talk to a Southeastern Massachusetts Estate Planning Attorney
At Surprenant, Beneski & Nunes, P.C., we understand the challenges families face when preparing for nursing home care. We will review your financial picture, explain your options, and create a personalized strategy to protect your assets while maintaining eligibility for MassHealth benefits.
Contact our Southeastern Massachusetts estate planning attorneys today to schedule a consultation. Together, we will help you prepare for the future and safeguard what matters most.