December 12, 2025
By:
Anthony B. Ferraro
How Basic Estate Plan Documents Can Protect You from the Substantial Cost of Long-Term Care
Assisted Living and Skilled Nursing Home Care
There are many different types of estate planning documents, which often leads to the same important question: which ones do you need, especially when you are concerned about the substantial cost of long-term care?
The cost of long-term care is an issue for many of our clients, as they are for approximately 66% of the U.S. population. For that reason, it is important to understand how the four basic estate planning documents outlined below can help prevent financial hardship while also remaining eligible for governmental benefits such as Medicaid.
So, how can these four common and familiar documents help protect you against the substantial cost of long-term care?
1. Will
This document enables you to appoint an executor, identify who you would like in charge of your digital assets at the time of your death, dispose of real estate and personal property, and provide for the orderly disposition of your estate.
Solution: Wills can also be drafted for long-term care asset protection and to determine the type of Medicaid that pays for long-term care benefits, by including in your Will certain special asset protection trusts for your surviving spouse’s long-term care needs upon your death.
2. Revocable Living Trust v. Irrevocable Trust
These types of trusts can either be joint or separate. These trusts enable you to expand your estate plan to deal with matters such as protection against creditors, reduction of estate taxes, avoidance of probate, and in certain circumstances, protection against the devastating costs of long-term care.
These documents can be used in a pre-planning mode or a health crisis mode. A revocable living trust is often used to designate who will manage your trust-owned digital assets after you are deceased.
The revocable living trust should not be confused with it an irrevocable trust.
Solution: An irrevocable trust is generally more useful to protect assets against the devastating cost of long-term care because, depending on how it is drafted, it will not permit changes or access by the trust creator. That is what creates the asset protection feature of this type of trust. Obviously, this type of trust has pros and cons, and you should obtain the necessary legal counsel to make the correct decision for yourself.
3. Power of Attorney (“POA”) for Property
This document will designate an agent responsible for your finances and your real and personal property. It can either take effect immediately upon signing (Durable POA) or at a specific point in the future, usually when the principal becomes incapacitated, which must be certified by a Physician (Springing POA). It can be very straightforward or very detailed and, depending on how it is drafted, can remain in effect until your death.
Solution: The power of attorney for property can be drafted with specific language that allows for the legal and ethical repositioning of your assets in the event that you need to enter a long-term care facility and choose to seek Medicaid eligibility to protect against the substantial costs of long-term care.
4. Power of Attorney for Health Care
This document is essential because it identifies who you would like to communicate with your physicians to make medical decisions if you cannot do so.
This document also allows you to address your wishes for burial, organ donation, end-of-life wishes as it relates to quality of life versus duration of life, and when you would like the POA to go into effect.
Solution: This document also allows your agent under power of attorney to select the type of facility (Medicaid-certified or non-Medicaid-certified) that you may wish to enter, if and when you need long-term care.
If the rising cost of long-term care is a concern for you and your family, the right estate plan can make all the difference. Proper estate planning can preserve your assets, protect your loved ones, and prevent unnecessary financial hardship. We would be happy to review your current estate plan and help you create one designed to safeguard your assets and provide peace of mind. For a free 15-minute telephone consultation, contact Anthony B. Ferraro at (847) 698-9600.