Long-term care costs continue rising—2026 national averages estimate ~$119,000+ annually for a nursing home shared room (or $11,000+/month), per recent reports. Many American’s worry about depleting savings or home equity for nursing home care, potentially leaving little for spouses, kids, or grandkids.
Medicaid can help cover long-term care for eligible individuals, but strict asset/income rules apply (e.g., typically $2,000–$3,000 individual limit in most states, higher for spousal protections). Proactive planning—done well in advance—may help protect assets while qualifying if needed. This isn’t about “beating the system”—it’s exploring legal options for peace of mind.
Key 2026 Considerations
Federal rules stable (no major changes post-OBBBA), but states vary (e.g., some reinstated look-back rules or asset tests in 2026, like California’s Medi-Cal changes).
60-month (5-year) look-back period in most states for transfers—gifting assets too late can trigger penalties/delays.
Spousal protections: Community spouse often keeps more assets (~$30,000–$154,000+ in 2026, depending on state) and income allowance.
Beginner-Friendly Steps to Explore Asset Protection
Understand Your State’s Rules Check current Medicaid eligibility (assets ~$2,000 individual; spousal limits higher). Use official sites or consult—rules differ (e.g., home equity protections up to ~$713,000–$1M+ in many states).
Review Irrevocable Trusts (MAPT) A Medicaid Asset Protection Trust (irrevocable) transfers assets (home, savings) out of your countable estate. After 5-year look-back, they may not count for eligibility—protecting for heirs while qualifying if care needed. Pros: Asset preservation; cons: Irrevocable (can’t easily access/change).
Use Spousal Protections & Transfers For married couples: “Community spouse” rules allow keeping significant assets/income. Transfer home/title strategies or spousal refusal in some states can help.
Consider Other Tools
Annuities: Convert assets to income stream (spousal benefit).
Life estates: Retain home use while transferring remainder.
Long-term care insurance: Private coverage reduces Medicaid reliance.
Plan Early & Consult a Pro Start 5+ years ahead—late planning risks penalties. Get personalized review.
Comparison: Common 2026 Strategies
Strategy
Potential Benefit
Key Drawback/Risk
Look-Back Impact
Irrevocable MAPT
Shields assets for heirs after 5 years
Irrevocable; loss of control
60 months
Spousal Protections
Community spouse keeps higher assets/income
State-specific limits
Varies
Annuities/Life Estates
Income stream or home use retention
Complex rules; penalties if timed wrong
60 months
Long-Term Care Insurance
Covers costs privately first
Premiums; may not cover everything
None
Common Questions
Can I protect my home? Often yes—equity exemptions or trusts; spouse can live there.
What if I need care soon? Late transfers trigger penalties (ineligibility period); explore immediate options.
Is this legal? Yes—if compliant with rules; always use qualified elder law attorney.
These strategies offer potential ways to balance care needs and family legacy—no one-size-fits-all, and improper planning can backfire.
At J. Davenport Legal / Davenport & Associates, we guide American’s through these options affordably.
John F. Davenport, founder of J. Davenport Advisors/Davenport & Associates and J. Davenport Legal in Norwalk, CT, is a licensed attorney in New York and Connecticut. As an experienced estate planning attorney and financial advisor, he has spent more than 30 years guiding clients through revocable living trusts, asset protection planning, Medicaid strategies, and tax-efficient wealth transfer, while also providing investment advisory and retirement income planning services to help families secure both their lifetime needs and their legacy for their heirs.
