Estate Planning Strategies to Prepare for Long-Term Care

TL;DR Summary: Long-term care can drain even the most carefully managed savings. But with smart estate planning, you can protect your assets, preserve your independence, and ensure you get the care you deserve without burdening your family. Here are some top estate planning strategies to prepare for long-term care in California.

When most people think of “estate planning,” they imagine wills, trusts, and inheritance. But one of the most important (and often overlooked) goals of an estate plan is preparing for long-term care.

In California, where the cost of nursing homes or assisted living can easily exceed $10,000 per month, planning ahead isn’t just smart; it’s essential. Whether you’re caring for aging parents or preparing for your own future, understanding your options now can protect your home, savings, and peace of mind later.

Let’s explore the key estate planning strategies to prepare for long-term care and how Goff Legal’s experienced Medi-Cal Planning attorneys can guide you every step of the way.

Why Long-Term Care Planning Matters

Long-term care refers to the medical and personal assistance people often need as they age — things like help with bathing, dressing, eating, or managing medications. This care can happen at home, in assisted living, or in a skilled nursing facility.

Here’s the catch: Medicare doesn’t cover most long-term care. After a short rehabilitation stay, you’re on your own, and the costs add up fast.

Without a plan, families often face heartbreaking choices:

• Selling the family home to pay for care.
• Depleting retirement accounts meant for a surviving spouse.
• Depending on adult children for financial support.

Estate planning for long-term care helps you avoid those scenarios by aligning your legal, financial, and health care wishes.

Step 1: Understand Your Long-Term Care Options

Before planning, you need to know what types of care you might need and what they cost.

Common types of long-term care include:

• In-home care: A caregiver helps you remain at home ($35–$45/hour average in Northern California). 
• Assisted living: Semi-independent living with meals, medication management, and social activities ($5,000–$7,500/month). 
• Skilled nursing facilities: Round-the-clock medical care for chronic or serious conditions ($10,000–$15,000/month).

The right plan depends on your health, family support, and finances. Estate planning can help you build flexibility into your plan while protecting what matters most.

Step 2: Create a Revocable Living Trust

A revocable living trust is the cornerstone of most California estate plans. It helps your family avoid probate, manage your assets if you become incapacitated, and ensure your wishes are followed.

When planning for long-term care, a trust can also:

• Allow a chosen trustee (like an adult child) to manage assets if you can’t.
• Coordinate how funds will be used for your care.
• Keep your affairs private and avoid court involvement.

While a revocable trust won’t by itself shield assets from long-term care costs, it’s a vital first step in organizing your estate and preventing financial chaos later.

Step 3: Consider an Irrevocable Trust for Asset Protection

If protecting assets from future care costs is your priority, an irrevocable trust may be worth exploring.

Unlike a revocable trust, you can’t easily change or dissolve it — but that’s also what gives it power. Assets in a properly structured irrevocable trust are generally not counted when applying for Medi-Cal (California’s Medicaid program).

This means you could preserve your home or savings while still qualifying for long-term care coverage if you plan ahead.

Timing matters: Medi-Cal rules include a look-back period for certain transfers. Start early (ideally at least five years before you may need care) to maximize protection.

Step 4: Evaluate Long-Term Care Insurance

Estate planning and long-term care insurance go hand-in-hand.

Long-term care insurance helps pay for home health aides, assisted living, or nursing homes. Depending on your age and health, policies can be expensive, but they can also save hundreds of thousands in care costs.

Some modern policies combine long-term care benefits with life insurance or annuities, offering flexibility and potential return on investment.

If you’re considering insurance, talk to your estate planning attorney first. The right legal plan can complement your coverage and fill in the gaps.

Step 5: Plan for Medi-Cal Eligibility

California’s Medi-Cal program can cover long-term care, but the eligibility rules are complex and changing.

Historically, Medi-Cal had strict asset limits: individuals could keep only $2,000 in countable assets. While this asset test was eliminated in 2024, asset limits will return on January 1, 2026. Our recent blog post breaks down the specific 2026 changes in Medi-Cal rules.

The bottom line: Working with an experienced Medi-Cal Planning attorney ensures you:

• Keep exempt assets safe (like your home and retirement accounts).
• Avoid disqualifying transfers or penalties.
• Use legal tools (like irrevocable trusts) to qualify without impoverishing your spouse.

At Goff Legal, we’re tracking these 2026 Medi-Cal changes closely and helping clients adapt their estate plans now to stay ahead of the curve.

Step 6: Use Powers of Attorney and Advance Directives

Long-term care isn’t just about money; it’s about who makes decisions when you can’t.

A comprehensive estate plan should include:

• Durable Power of Attorney: A document that appoints someone to make financial decisions on your behalf if you become incapacitated. 
• Advance Health Care Directive: A document that names an agent to make health care decisions on your behalf if you are unable to do so and outlines your wishes for end-of-life choices.
• HIPAA Authorization: A waiver that should be included in your Advance Healthcare Directive that gives your agent access to your medical information.

Without these documents, your loved ones may need to go through costly court proceedings to manage your affairs during a time of significant stress.

Step 7: Plan for Your Home and Real Estate

For many Californians, their home is the most valuable asset in their estate. Planning ahead allows you to:

• Keep your home from being sold to pay for care.
• Transfer it to loved ones through a trust.
• Avoid estate recovery claims after death (Medi-Cal can sometimes seek reimbursement from your estate).

Depending on your goals, tools like a revocable trust, life estate, or irrevocable trust can help you protect your home and pass it on efficiently.

Step 8: Plan for a Spouse’s Needs

For married couples, one spouse often requires care before the other. Without proper planning, this can leave the healthy spouse financially vulnerable.

Estate planning helps ensure that:

• The healthy spouse can keep enough income and assets to live comfortably.
• Medi-Cal’s “spousal impoverishment” rules are navigated correctly.
• Joint accounts and property are properly titled for protection.

With thoughtful planning, you can provide care for one spouse without bankrupting the other.

Step 9: Coordinate with Financial and Tax Professionals

Estate planning for long-term care is a team effort. At Goff Legal, we often work alongside financial advisors, CPAs, and insurance specialists to create an integrated plan that covers:

• Income tax implications of asset transfers.
• Investment strategies to sustain long-term care costs.
• Gifting strategies that won’t jeopardize Medi-Cal eligibility.

A cohesive plan saves your family money and headaches down the road.

Step 10: Review Your Plan Regularly

Your health, finances, and the law all change over time. So should your estate plan. We recommend reviewing your plan:

• Every 3–5 years, or
• After major life events (like retirement, the death of a spouse, or selling a home).

Regular updates keep your plan aligned with California’s evolving rules and ensure your family isn’t caught off guard when care is needed.

How Goff Legal Helps You Prepare

At Goff Legal, we’ve helped hundreds of California families protect their assets and plan for long-term care with compassion and clarity.

Our woman-owned boutique law firm offers:

• Personalized planning: We tailor each strategy to your goals and health outlook.
• Up-to-date legal guidance: We stay on top of Medi-Cal and tax law changes.
• Comprehensive support: From trusts to long-term care coordination, we cover it all.

We believe estate planning should empower you, not overwhelm you. Our team takes the time to explain every option in plain English, so you can make confident decisions about your future.

Seek Legal Counsel

Long-term care is one of the biggest financial and emotional challenges families face. But with proactive estate planning, you can turn uncertainty into peace of mind.

Whether you’re planning for yourself or helping a loved one, now is the time to act. The earlier you plan, the more options you have.

Contact Goff Legal today for a free discovery call to discuss your long-term care goals and learn how we can help protect your assets, your dignity, and your future.

FAQs

What’s the difference between Medi-Cal and Medicare when it comes to long-term care?

Medicare covers only short-term skilled nursing or rehabilitation after hospitalization,  usually up to 100 days. Medi-Cal, on the other hand, can cover long-term nursing home care, but only if you meet strict eligibility rules.

Can I give my house to my kids to avoid paying for nursing home care?

Transferring your home outright can trigger tax problems and affect your Medi-Cal eligibility. A trust-based strategy usually offers more protection and flexibility. Always talk to a Medi-Cal Planning attorney before transferring property!

What happens if I need care and haven’t done any planning?

Even if you haven’t prepared, it’s not too late. Emergency Medi-Cal planning can sometimes help preserve part of your assets, but acting early provides far more options and savings.

Are long-term care costs tax-deductible?

In some cases, yes. Certain medical and long-term care expenses can be deductible if they exceed a percentage of your income. A CPA or estate planning attorney can help determine what qualifies.

How do I start planning for long-term care?

The best first step is a consultation with an experienced Medi-Cal planning attorney. At Goff Legal, we’ll help you assess your situation, explain your options, and create a plan that protects you and your loved ones.