For many New Jersey families, building wealth isn’t just about enjoying retirement, it’s about leaving a legacy. Whether that means preserving the family home, helping grandchildren pay for college, or passing assets to the next generation, most people spend decades saving with those goals in mind.
Unfortunately, one unexpected expense can unravel even the best financial plan: long-term care.
A recent report from the Roosevelt Institute highlights what elder law attorneys have witnessed for years: the rising cost of long-term care is rapidly depleting the savings of middle-class families. Here in New Jersey, where the cost of care is among the highest in the nation, the financial impact can be even more severe.
The good news? With proactive planning, families may have options to protect assets while ensuring loved ones receive the care they need.
Long-Term Care Is More Common Than Most People Realize
Many people assume they will remain healthy throughout retirement or that Medicare will pay for nursing home care if they ever need it.
Neither assumption is safe.
More than half of Americans turning age 65 today will require some form of long-term care during their lifetime. Approximately one in five will need care for more than five years.
Long-term care can include:
- Home health aides
- Adult day programs
- Assisted living communities
- Memory care
- Skilled nursing facilities
While many people hope to remain at home, the level of care often increases over time as health conditions progress.
The Cost of Care Can Be Overwhelming
Long-term care is expensive nationwide, but New Jersey families frequently face costs that exceed national averages.
Depending on the level of care needed, annual expenses can easily reach six figures.
For example:
- Full-time home care may cost tens of thousands of dollars annually.
- Assisted living can cost well over $100,000 per year in many parts of New Jersey.
- Nursing home care often exceeds $150,000 annually for a private room.
Even families who have saved diligently can watch decades of retirement savings disappear in just a few years.
Medicare Doesn’t Cover What Most Families Think It Does
One of the biggest misconceptions we hear is:
“Medicare will pay for the nursing home.”
In reality, Medicare provides only limited coverage for short-term skilled nursing or rehabilitation following a qualifying hospital stay.
It does not pay for long-term custodial care, including assistance with activities such as:
- Bathing
- Dressing
- Eating
- Walking
- Toileting
- Medication management
These are the services many older adults eventually require, and they are often paid for privately until other options become available.
Medicaid Can Help, But Planning Matters
Unlike Medicare, Medicaid can help cover long-term care costs for eligible individuals.
However, Medicaid is a needs-based program with strict financial eligibility requirements.
Many families mistakenly believe they must lose everything before qualifying.
While Medicaid has income and asset limits, there are also legal planning strategies that may help protect certain assets when planning is done early enough.
Depending on the family’s circumstances, planning opportunities may include:
- Medicaid Asset Protection Trusts
- Caregiver agreements
- Qualified income trusts
- Spousal asset protection strategies
- Proper use of exempt assets
- Advance gifting strategies that take Medicaid’s five-year look-back period into account
Every family’s situation is unique, and the appropriate strategy depends on numerous financial and personal factors.
Long-Term Care Can Impact an Entire Family
The financial consequences extend far beyond the individual receiving care.
Adult children frequently become caregivers, reducing work hours or leaving the workforce altogether to help aging parents.
This can result in:
- Lost income
- Reduced retirement savings
- Delayed career advancement
- Increased emotional stress
At the same time, parents may exhaust the assets they hoped to leave to their children and grandchildren.
Instead of creating generational wealth, years of long-term care expenses can consume an estate that took decades to build.
Planning Before a Crisis Creates More Options
The best time to plan for long-term care is before care is needed.
Waiting until a loved one enters a nursing home significantly limits the available planning opportunities.
Early planning allows families to:
- Understand what Medicare and Medicaid actually cover.
- Evaluate long-term care insurance or hybrid insurance products.
- Protect assets where legally permissible.
- Establish powers of attorney and healthcare directives.
- Create estate planning documents that reflect current wishes.
- Develop a plan for future caregiving and decision-making.
Perhaps most importantly, advance planning gives families time to make thoughtful decisions instead of reacting during a medical emergency.
Families Should Not Wait
Because New Jersey has some of the highest long-term care costs in the country, waiting until a crisis occurs can be extraordinarily expensive.
An experienced New Jersey elder law attorney can help families understand:
- Medicaid eligibility rules
- Asset preservation strategies
- Long-term care planning options
- Estate planning updates
- Planning opportunities for married couples
- How to balance quality care with long-term financial security
Every family’s goals are different, but nearly everyone shares the same objective: ensuring loved ones receive quality care without unnecessarily sacrificing a lifetime of savings.
Protect Your Family’s Future with Proactive Planning
Long-term care planning isn’t just about qualifying for benefits, it’s about preserving dignity, protecting financial security, and providing peace of mind for future generations.
At Mandelbaum Barrett PC, our Elder Law attorneys help New Jersey families navigate the complex legal and financial issues surrounding long-term care, Medicaid planning, estate planning, and asset protection. Whether you’re planning years in advance or facing an immediate care crisis, our team can help you develop a strategy tailored to your family’s needs.
The earlier you begin planning, the more options you may have to protect both your loved ones and the legacy you’ve worked so hard to build.