June 25, 2026
By:
Anthony B. Ferraro
Three Costly Mistakes to Avoid When Entering a Long-Term Care Retirement Facility
Including Independent Living, Assisted Living, Memory Care, Supportive Living, or Nursing Home Facilities
Mistake #1: Signing a Long-Term Care Contract Without Legal Review
Long-term care contracts often cost between $8,000 and $15,000 per month. We have seen some Continuing Care Retirement Community contracts that require initial deposits ranging from $200,000 to $750,000.
These contracts should be reviewed by an elder law attorney before signing. Certain long-term care contracts contain “hold harmless” and indemnification clauses. These provisions rarely work to the resident’s advantage. When a resident or their authorized representative (for example, an agent under power of attorney) signs such a document, the resident, the representative, or both may become liable for attorney fees, costs, and other expenses incurred by individuals associated with the facility, including administrators, physicians, nurses, and vendors, arising from acts alleged to have been caused by the resident.
Mistake #2: Assuming You Must Spend Down All of Your Assets
If you are applying for Medicaid at a supportive living facility or a skilled nursing facility that participates in the Medicaid program, do not assume you must spend down all of your assets to reach the Medicaid asset limit, such as $17,500 for a single individual.
It is not always necessary to spend the remainder of your life savings on long-term care expenses. Many families are surprised to learn that Medicaid planning opportunities may still be available even after long-term care becomes necessary.
Medicaid rules provide for many allowable transfers, non-countable assets, and other planning strategies that may help an individual achieve Medicaid eligibility while preserving assets and income. Do not assume spending down your assets is your only option, particularly when a community spouse, disabled adult child, minor child, or other dependent family member is involved.
Mistake #3: Allowing a Facility to Prepare Your Medicaid Application
While a facility may offer to prepare a Medicaid application at no charge, families should understand the limitations of that service before relying upon it.
Quite often, a facility offers to prepare a Medicaid application in order to obtain government reimbursement for a resident’s long-term care costs. Although convenient, this approach may overlook opportunities to preserve assets legally and ethically through allowable transfers, non-countable assets, and the conversion of assets into Medicaid-compliant income vehicles such as notes, annuities, and trusts.
We frequently meet families who were told they had to spend nearly all of their assets before qualifying for Medicaid, only to discover that planning opportunities existed that could have preserved a significant portion of those assets.
Implementing these strategies constitutes the practice of law, and long-term care facilities are not licensed to provide legal advice as attorneys are.
Long-term care decisions often involve significant legal, financial, and personal considerations. Taking the time to understand your options before signing contracts, spending assets or applying for Medicaid can help protect both your interests and your family’s financial future.
If you or a loved one is considering long-term care and have questions about the process, contact Attorney Anthony B. Ferraro at 847-698-9600 or aferraro@robbinsdimonte.com.
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