How Rising Long-Term Care Costs Are Changing Estate Planning
Have you thought about what would happen to your savings if you needed to spend a year or two in a nursing home? For many families, that question reveals a gap in their estate planning that can be costly to ignore. Long-term care expenses have been climbing steadily for years, and they are now reshaping the way people in Georgia think about protecting their assets and passing wealth to their loved ones.
The Numbers Are Hard to Ignore
According to a recent survey, the national annual median cost of a private room in a nursing home reached $127,750 in 2024, a 9% jump from the prior year. Assisted living was not far behind, rising 10% to a median of $70,800 per year. Home health care costs climbed as well. These are not isolated spikes. The trajectory has been consistently upward, and projections suggest the trend is not slowing.
What does this mean practically? A two-year stay in a private nursing home room could cost close to $260,000. Many people assume Medicare will cover these bills. It will not. Medicare covers short-term skilled nursing care after a hospitalization, but it does not pay for custodial care, which is the type of ongoing daily assistance most people eventually need. Medicaid can cover long-term care, but only after a person’s assets have been substantially depleted, unless proper planning has been done well in advance.
How This Is Shifting Estate Planning Priorities
Rising costs have pushed Medicaid planning from the edges of estate planning to the center of it for many Georgia families. If your goal is to leave assets to your children or grandchildren rather than spending everything down on nursing home bills, the timing and structure of your planning matters enormously.
Georgia, like other states, has a Medicaid look-back period. Transfers of assets made within five years of applying for Medicaid can be scrutinized and may result in a penalty period during which Medicaid coverage is delayed. This means that waiting until a health crisis hits to start thinking about asset protection is often too late. Some of the tools that estate planning attorneys use to address these concerns include:
- Medicaid Asset Protection Trusts (MAPTs), which are irrevocable trusts that remove assets from your countable estate for Medicaid purposes while still allowing certain benefits to flow to you during your lifetime
- Irrevocable trusts designed to protect real property, particularly a family home, from being lost to nursing home costs or Medicaid estate recovery
- Gifting strategies that are carefully timed and structured to comply with Medicaid rules
- Long-term care insurance, which can help offset costs and reduce the pressure on other assets
- Powers of attorney and advance directives, which ensure that if you are incapacitated, a trusted person can manage your finances and healthcare in line with your wishes
What About Your Home?
For many Georgia residents, their home is their most significant asset. One concern that arises with Medicaid planning is whether the state can recover the cost of care from your estate after your death, including your home. Georgia participates in Medicaid Estate Recovery, which means that, depending on how your estate is structured, the state may have a claim against your estate for reimbursement of long-term care costs paid by Medicaid. Proper planning can help protect your home and other assets from this outcome.
Take Action Before You Need It
The most effective long-term care planning happens years before a health crisis arrives. Whether you are in your 50s thinking ahead or your 70s looking to put protections in place, the key is to start now.
We encourage you to reach out to Bowman Law Firm for guidance. Our Norcross estate planning attorneys work with families throughout the greater Atlanta area to design plans that account for the real cost of aging. If you are concerned about long-term care costs and what they could mean for your estate, contact us today to schedule a consultation.
Source:
carescout.com/cost-of-care