How to Preserve your Assets from Nursing Home Costs

Care facilities provide a valuable service to the disabled and elderly. Often, people are in nursing homes because estate planningthey have no one to care for them or because their family is unable to provide the level or type of care required. Unfortunately, nursing homes are expensive. Nursing home costs leave many seniors no choice but to give away their property. Also, many nursing home residents think Medicare will meet their needs and cover the rent, but it does not. Sadly, this leaves seniors no choice but to use their assets and life savings. Also, not all seniors must stay in a care facility long term, so after a while they return home. However, there is often nothing to which to return, because the home has been sold to cover the cost of nursing home care. It is discouraging to the individual, and to their family who invested a great deal of time and care into their relative.

There are several steps one can take in order to preserve a life’s work and investment. These steps can help ensure your property remains safe and provide some basic instruction on how to preserve your assets. They can, therefore, stay within your family or be waiting when you return home.

Give Away Money and Valuables to Trusted Loved Ones

As you get older, there are often warning signs that you may be getting sick. It may not mean you need a nursing home, but if there are things you wanted to disburse among your family, try to do it before being admitted to the nursing home. It is not uncommon for items to be lost at auction to cover the costs of nursing home care. Give any cash as gifts to the people you love and trust the most, or place it in a safety deposit box only they are allowed to open. Keep such transactions private. Giving gifts in this way is perfectly legal.

Hire Counsel

Contract an attorney to draft a “life estate” for the property in question. Then, instruct them to name either your loved one, you or a family member as the executor. A life tenant has the right to live in their home until the day they pass away. After death, the owner can transfer the property to their loved ones, and it prevents claims from anyone else, so long as the estate originated at least five years prior to the illness.

Preserve Fixed Annuities*

A fixed annuity* is the best place to hold liquid assets. Ohio law preserves this particular practice. In addition to the preservation, Ohio doesn’t count payouts from fixed annuities* when determining Medicaid eligibility, so you can transfer various assets. If your home state still does not recognize fixed annuity* payments for someone applying for Medicaid, then you can transfer them to another mutual fund.

Preserve Yourself

Regardless of any existing arrangement between you and your spouse, it is a wise practice to transfer a small amount of money to your spouse due to the Federal Spousal Impoverishment Act. If the spousal income is below what the state exempts, you can give a portion of your income to your spouse to close the gap. The money sent to the spouse is noted as hardship, and it is exempt. Unless further investigation would reveal special situations, the money transferred for maintenance is also sheltered under federal law.

Use an Irrevocable Trust

An irrevocable trust is almost impenetrable. Unlike the living trust, the irrevocable trust shields against mounting nursing costs for house calls. Although you are unable to receive principal from the irrevocable trust, the dividends and sporadic interest are unable to be seized by the government for any reason.

Pour-Over Trust

This type of trust allows you to use your money while preserving the assets from seizure, and you can still access your bank. It can be advanced and used to create a new will, or to modify one as well. Additionally, it provides nursing home preservation for the living spouse, so there is financial preservation for both parties no matter who enters a nursing care facility first.


*Annuities contain limitations including withdrawal charges, fees and a market value adjustment which may affect contract values