How We Saved This Family $324,000 in Nursing Home Costs: Real Medicaid Planning Case Study | Repair The Roof Podcast

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Board-certified estate planning attorney Ted Gudorf highlights the critical importance of Medicaid planning, especially in crisis situations. He uses a case study to show how strategies like Medicaid-compliant annuities and asset protection trusts can protect a family's assets while ensuring a loved one receives quality care. Gudorf also stresses the significance of timing, particularly the five-year look-back period, which can significantly impact a family's financial outcomes.

How One Family Protected Their Home and Life Savings During a Long-Term Care Crisis

Most families don’t realize it until it’s too late. A majority of older Americans will need long-term care at some point in their lives. Without a plan, many end up spending everything they’ve worked for, only to qualify for Medicaid when little remains.

It doesn’t have to be that way.

This real-life case study shows how one Ohio couple avoided financial ruin when dementia forced an urgent move to memory care. By using specialized Medicaid planning strategies, they preserved their savings, kept their home, and ensured quality care — even when it seemed impossible.

Key Takeaways:

  • 70% of Americans over 65 will need long-term care.
  • Proper Medicaid planning can save families significant assets.
  • Crisis situations require immediate and strategic planning.
  • Understanding Medicaid rules is crucial for asset protection.
  • Prepaid funeral expenses can help reduce countable assets.
  • Income planning can shift resources to maintain financial security.
  • Trust-based planning is essential for future asset protection.
  • Every family's situation is unique and requires tailored strategies.
  • The five-year look-back period is critical in Medicaid planning.
  • Starting planning early provides more options and better outcomes.

The Thompson Family’s Crisis

John and Mary Thompson were like many couples — comfortable, financially stable, and not thinking about long-term care until life demanded it.

When Mary’s dementia progressed to the point she required constant supervision, John tried to care for her at home. Months of physical and emotional exhaustion led him to the difficult decision to move her into a memory care facility.

The cost was far more than their monthly income, and at that rate their savings would have been gone within a few years, leaving John with nothing to live on.

The Medicaid Misconception

Many believe Medicaid is only for those with very limited means. The truth is, even in a crisis, there are legal strategies that can protect substantial assets while still qualifying for benefits.

For married couples, certain assets can be preserved for the spouse who remains at home, including:

  • The family home

  • One vehicle

  • A portion of other assets

The Thompsons had more than Medicaid rules allow, which meant they needed a plan to restructure their resources quickly. Gifting to family was not an option due to Medicaid’s five-year look-back period.

The Strategic Moves That Changed Everything

We helped the Thompsons protect the majority of what they owned through a combination of steps:

  • Medicaid-Compliant Annuity – Converted excess savings into a special annuity, reducing countable assets and allowing immediate Medicaid eligibility.

  • Home Protection – Transferred the family home into a Medicaid Asset Protection Trust to shield it from recovery while allowing John to live there for life.

  • Upgrading Exempt Assets – Purchased a reliable vehicle and prepaid funeral and burial expenses, all exempt under Medicaid rules.

  • Estate Plan Updates – Revised wills, powers of attorney, and healthcare directives while Mary could still sign documents, and created a trust to preserve her eligibility if John passed first.

  • Future-Proofing for John – Established a trust for John to safeguard remaining assets if he ever needs care himself.

  • Income Planning – Shifted part of Mary’s income to John under Medicaid’s spousal allowance, helping him meet living expenses.

The Results

  • Mary qualified for Medicaid immediately

  • The family kept their home and the majority of their savings

  • Final expenses were secured in advance

  • John remained financially stable

  • The children will inherit the family home and protected assets

Why Every Plan Must Be Unique

This approach worked because it matched the Thompsons’ exact circumstances — a married couple, one spouse needing immediate care, and specific asset levels. A different situation may require a completely different strategy. That’s why working with an experienced elder law attorney is essential. The wrong decision can cost a family everything they’ve built.

Key Takeaway

Even if you believe you have “too much” to qualify for Medicaid, the right planning can protect your assets. But timing is critical. The five-year look-back period means early action provides more options, while waiting until a crisis hits limits what can be done.

Protect Your Family’s Future — Starting Today

If you’re facing a long-term care crisis or want to safeguard your assets before one strikes, don’t wait. Every month you delay could mean the difference between protecting your life savings or losing it to care costs.

Call our office today to schedule a Medicaid planning consultation and discover which strategies will work for your family.

Your home, your savings, and your dignity are worth protecting.

Transcript: Prefer to Read — Click to Open

Ted Gudorf (00:56.558)

Did you know that 70 % of Americans over 65 will need long-term care at some point, yet most families lose everything paying for it? Today, I’m going to walk you through a real-life case study that shows exactly how proper Medicaid planning can save a family over $350,000 while ensuring quality care. By the end of this video, you’ll understand the specific strategies we use to protect assets

and to qualify for Medicaid benefits, even when families think they have too much money to qualify. I’m Ted Gudorf a board certified estate planning attorney with a post-doctorate degree in elder law. I’ve helped thousands of Ohio families navigate Medicaid planning over the past 35 years. What I’m about to share with you is an actual case study from our practice with names changed for privacy.

that demonstrates how crisis Medicaid planning works in the real world. Let me introduce you to John and Mary Thompson. John is 75, Mary is 73, and they’re facing every family’s worst nightmare. Mary has developed dementia and can no longer be safely cared for at home. After months of John trying to manage her care himself, he’s exhausted, and Mary needs 24-hour supervision and a memory care facility. The monthly cost?

$8,365 per month for a semi-private room, and that’s here in Ohio, where costs are lower than many states. Here’s their financial picture when they first walked into our office. They own their home. It’s worth about $165,000, and it is paid off. They have about $500,000 in what we call countable assets. That’s CDs, savings accounts,

investment portfolios and retirement funds. Now John receives $1,600 monthly in Social Security and pension benefits while Mary gets $900 monthly. So their total monthly income is $2,500. Now let’s look at their monthly expenses. The nursing home costs $8,365 plus health insurance premiums of about $200.

Ted Gudorf (03:23.49)

That’s $85.65 in care-related expenses alone. John still has living expenses at home of about $1,500 per month. Their total monthly shortfall is over $7,565 after their income. At this rate, they would spend through their entire $500,000 in savings in about five and a half years, leaving John with virtually nothing.

This is what we call a crisis situation. No advance planning was done, and now we need to act quickly to protect what we can. Many families think it’s too late once someone is already in a nursing home, but that’s just not true. Even in crisis mode, we can still implement strategies to save significant assets. Here’s exactly what we did for the Thompsons. First,

we needed to understand Ohio’s Medicaid rules. For a married couple where one spouse needs nursing home care, the healthy spouse at home, called the community spouse, is allowed to keep certain assets. In Ohio, the community spouse resource allowance is currently $157,920 in 2025. This means John gets to keep up to $157,920.

$920 in countable assets, plus he gets to keep the house and one car without affecting Mary’s Medicaid eligibility. But if you remember, the Thompson’s had $500,000 in countable assets. That’s $342,080 over the limit. Here’s where strategic planning becomes crucial.

We can’t just give away that excess money because Medicaid has a five-year look-back period for gifts. Any gifts made within five years of applying for Medicaid create a penalty period where Medicaid simply will not pay. Instead, we used a combination of strategies. First, we used the excess resources above the community spouse resource allowance to purchase a Medicaid compliant annuity

Ted Gudorf (05:46.318)

payable to John over 18 months. This special annuity immediately qualifies Mary for long-term care Medicaid. Next, we address the house. While the house is generally an exempt asset, as long as its equity, strike that.

Ted Gudorf (06:08.79)

Next, we address the house. While the house is generally an exempt asset, as long as its equity doesn’t exceed $730,000, it can be subject to estate recovery after both spouses pass away. So, we help transfer the house into a Medicaid Asset Protection Trust after Mary qualified for Medicaid. This protects the house from Medicaid estate recovery while allowing John to live there.

for the rest of his life. We also recommended John purchase a reliable new car for about $25,000. A vehicle is an exempt asset, and John needed dependable transportation to visit Mary and handle his affairs. This further reduced their countable assets while providing John with a practical benefit. Additionally, we helped them prepare, strike that. Additionally, we helped them prepay

for both of their funeral expenses and burial plots. They purchased the irrevocable funeral policies totaling $15,000 and bought cemetery plots for another $8,000. These are completely exempt assets under the Medicaid rules, and it ensured their final wishes would be honored while reducing their countable assets. Many families overlook this strategy, but prepaid funeral expenses are one of the few ways to spend down assets

without creating a penalty period. For their estate planning documents, we prepared new wills, powers of attorney, and healthcare directives. Mary’s capacity was declining, so we needed to do it quickly while she could still sign legal documents. We also set up what’s called a testamentary supplemental needs trust that would receive any assets in John’s name should he predecease Mary. This relatively unknown strategy would enable Mary

to continue qualifying for Medicaid benefits despite John’s passing. Let me restate that last part.

Ted Gudorf (08:19.138)

This relatively unknown strategy would enable Mary to continue qualifying for Medicaid benefits despite John’s passing. Critically important for John’s future protection, we established a comprehensive trust-based estate plan for him. We created the Medicaid Asset Protection Trust for John in the event he ever needs long-term care himself. This trust-based plan means that if John requires nursing home care in the future,

We already have the legal framework in place to protect his remaining assets for their children. Without this planning, John could face the same crisis situation Mary experienced, potentially losing everything he worked so hard for. The trust also includes disability planning provisions. So if John becomes incapacitated, his successor trustees can manage his affairs and implement additional Medicaid planning strategies if needed.

Ted Gudorf (10:43.832)

This forward-thinking approach ensures that the assets we save from Mary’s care crisis remain protected for the next generation, regardless of what health challenges John may face in the future. Here’s where it gets interesting with income planning. Mary’s $900 monthly income has to go toward her nursing home care. We call that her patient liability. But we were able to shift some of her income to John.

through a technique called the minimum monthly maintenance needs allowance. Since John’s housing costs and living expenses exceeded his income, we could redirect some of Mary’s Social Security to him, bringing his monthly income up to about $2,100 within the current allowable limits. The results were dramatic. Instead of spending down all $500,000 over five and a half years, Mary immediately qualified for Medicaid.

The family saved approximately all of their assets that would have otherwise been spent on nursing home care. John maintained his financial security and kept the house. The prepaid funeral expenses and burial plots provided additional peace of mind and asset protection. But here’s what many people don’t realize. This isn’t just about saving money. It’s about preserving dignity and options.

With proper Medicaid planning, Mary received the same quality care she would have as a private pay resident. John didn’t have to sell their home or deplete their life savings. Their children will inherit the family home and substantial protected assets. The key lesson from the Thompson case study is that even in crisis situations, with substantial assets, proper legal planning can save families hundreds of thousands of dollars.

But the strategies we use depend entirely upon your specific situation. Your assets, your income, the family structure, and the timing all affect which techniques will work best.

Ted Gudorf (13:55.406)

For families with assets over $300,000, the Medicaid compliant annuity approach often provides the best results in crisis situations. Every family situation is unique. The strategies that work for the Thompsons

Ted Gudorf (14:30.304)

Every family situation is unique. The strategies that work for the Thompsons might not be appropriate for your family. Asset levels, income sources, family dynamics, and health conditions all influence the planning approach. That’s why it’s crucial to work with an experienced elder law attorney who understands both the legal requirements and the practical realities of Medicaid planning. The trust-based planning we implemented for John is particularly important

because it creates a foundation for future protection. Many families focus only on the immediate crisis, but fail to plan for what happens next. John’s irrevocable trust can be modified or converted to provide additional asset protection if his health declines. Let me strike that.

Ted Gudorf (15:25.144)

The trust-based planning we implemented for John is particularly important because it creates a foundation for future protection. Many families focus only on the immediate crisis but fail to plan for what happens next. John’s Medicaid Asset Protection Trust is the perfect solution for him. This comprehensive approach ensures that the wealth we preserve continues to be protected for future generations in the event John needs care.

If you’re facing a long-term care crisis or want to plan ahead to protect your family’s assets, don’t wait. The sooner you start planning, the more options you’ll have and the more assets you can protect. Medicaid planning isn’t just about qualifying for benefits. It’s about preserving your family’s financial security and ensuring quality care when you need it most. Now that you understand how these crisis strategies work, you need to know the critical timing rules

that make or break your planning success. The five-year look-back period we mentioned is the foundation of all Medicaid planning. And understanding it completely can save your family hundreds of thousands of dollars. Click right here to understand.

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