By Skip Skolnik

When it comes to protecting assets from the costs of nursing home care, most people don’t plan—they react. And unfortunately, reaction is rarely a strategy. It’s like stepping onto a football field without knowing the rules, expecting to win by instinct alone. The reality is that nursing home protection and navigating the Medicare and Medicaid systems require not only action, but informed, proactive planning. And that starts with understanding the rules.

Let’s draw a parallel to something more familiar: taxes. Each year, millions of Americans file their taxes. According to the IRS, approximately 68% of taxpayers hire a professional—either a tax preparer or an accountant—to help them through the process. Why? Because the tax code is complex, constantly changing, and the cost of getting it wrong can be high. People understand that messing up your taxes can mean audits, penalties, and a painful letter from the IRS. So they pay for help.

Now here’s the irony: the financial risk of mishandling long-term care planning, particularly concerning Medicaid, is just as severe, if not more so. But far fewer people seek professional help early enough. When it comes to Medicare, Medicaid, and nursing home costs, most people don’t think about planning until a loved one is already in crisis: a sudden stroke, a diagnosis of dementia, or an accident that leaves them unable to live independently. By that point, the options are limited, and the clock is ticking.

The problem is twofold.

First, the system is complicated. Medicaid eligibility rules are not intuitive. They involve asset limits, income tests, look-back periods, penalty calculations, and exempt resources. Even Medicare, which most people assume will cover long-term care, offers only limited benefits, and only in specific situations. Without a clear understanding of these programs, families make costly assumptions. For example, many people believe they can simply give their house to their children if they need care, unaware that such a transfer may trigger a Medicaid penalty period if it occurs within five years of applying for benefits.

Second, the system is unforgiving. With the IRS, you might be able to amend a return or negotiate a settlement. However, with Medicaid, a misstep could result in losing tens or even hundreds of thousands of dollars in nursing home costs, which can exceed $10,000 per month. And there’s no redo button. If a family sells the house, spends down assets incorrectly, or gifts money at the wrong time, that mistake may be irreversible. The most misunderstood rule in Medicaid planning is the five-year look-back period. Medicaid reviews all financial transactions going back five years from the date of the application. Any gifts or transfers made during this period can result in a penalty—a period during which Medicaid will not pay for care, even if the applicant qualifies otherwise. This rule alone should be a wake-up The most misunderstood rule in Medicaid planning is the five-year look-back period. Medicaid reviews all financial transactions going back five years from the date of the application. Any gifts or transfers made during this period can result in a penalty—a period during which Medicaid will not pay for care, even if the applicant qualifies otherwise. This rule alone should be a wake-up call to anyone over the age of 60. You must plan five years in advance to fully protect your assets. That’s not a short-term mindset. That’s a strategic one.

And yet, as a society, we are notoriously bad at long-term planning. We wait. We avoid. We hope it won’t happen to us. But statistically, it will. According to the U.S. Department of Health and Human Services, 7 in 10 Americans over the age of 65 will need long-term care at some point. Ignoring this fact is not preparation—it’s denial.

Understanding the rules means accepting that nursing home care is not just a medical issue—it’s a financial one as well. It’s a legal one. It’s a family legacy issue. And the rules—complicated as they are—can be used to your advantage if you act early enough. There are legitimate, legal strategies involving irrevocable trusts, asset conversions, income planning, annuities, and even pre-planned funeral arrangements that can preserve a lifetime of savings.

But you need a guide. Just as you wouldn’t file a complex tax return without a CPA, you shouldn’t attempt Medicaid planning without professionals who know the rules. That’s why our team includes elder law attorneys, Medicaid specialists, financial advisors, insurance professionals, and more. Because no one person can master it all, and no one family should have to figure it out in the middle of a crisis.

The bottom line is this: Winging it is not a plan. And when the stakes are this high, the cost of improvisation is devastating. The rules are there, and while we can’t change them, we can use them—if we understand them.

So don’t wait for a crisis. Don’t assume you can figure it out later. Learn the rules now. And build a plan that protects your loved ones and your legacy, long before the nursing home ever becomes part of the picture.