Home Ownership in Later Years: Protecting the House While Planning Ahead for Long-Term Care
For many older adults, the family home isn’t just a place to live—it’s where their life occurred. It holds decades’ worth of memories, a sense of stability, and often represents their biggest financial asset. But as health needs shift with age, that same home can take on a much different role. What once symbolized freedom and independence may become the very thing that funds their long-term care. In other cases, if there are no plans in place, the asset could be vulnerable to creditors when care costs begin to climb.
The hidden cost of care
In Virginia and across the U.S., the cost of long-term care has continued to climb. A single year in a nursing facility can exceed $100,000, and even part-time in-home care can add up quickly. Most families don’t realize that Medicare does not cover long-term custodial care. This leaves seniors to rely on private funds or Medicaid once savings are depleted.
Without proper planning, the family home (often a senior’s greatest asset) can be drawn into that financial equation. For that reason, elder law attorneys tend to emphasize early asset protection planning: protecting the home before a crisis occurs, not after one.
Understanding how the home fits into Medicaid rules
When it comes to paying for long-term care, Medicaid can be a lifeline. But qualifying isn’t just about medical need. It also depends on income and assets. In a lot of cases, a senior’s primary home is protected while they’re still living in it. But if they move permanently into a care facility or pass away, the home suddenly becomes vulnerable. Through a process known as estate recovery, Medicaid can try to recoup costs by claiming a portion (or even all) of the home’s value.
On the other hand, the good news is that with the right planning, families can usually avoid that outcome. Options like life estate deeds, irrevocable trusts, or transfer-on-death designations all help to make sure the home passes directly to heirs. Further, the home won’t pass through probate or trigger estate recovery. Each option has its pros and cons. Some limit control, impact taxes, or come with specific timing rules. That’s why it’s so important to get personalized legal advice before you make any big decisions.
Balancing independence and protection
Many older adults want to stay in their homes for as long as they can. Planning ahead doesn’t mean giving up control; in fact, it’s about building flexibility. By updating your legal documents and making smart choices about how the home is titled, seniors can keep decision-making in their own hands while also protecting the property for the future.
For example, consider a revocable trust. It lets the homeowner stay in charge during their lifetime while making it easier for the home to pass to their heirs without the delays associated with probate. If stronger protection is needed, especially in the context of Medicaid planning, an irrevocable trust might be the best fit. It can shield the home from being counted as a Medicaid asset, so long as it’s set up at least five years before long-term care is needed.
Talk to a Virginia Beach Estate Planning Attorney Today
The Law Office of Angela N. Manz represents the interests of those seeking to protect their assets from medical creditors. Call our Virginia Beach estate planning lawyers today to schedule an appointment, and we can begin discussing your path forward right away.