The fact is that 50% of all adults over 65 will require long term care of some kind in their lifetime. Understandably, individuals who have worked all their lives to build a nest egg for retirement and who want to see their children inherit the fruits of their labor, do not wish to see it all depleted to pay the high cost of their long term care.

Many falsely believe that Medicare will cover the cost of their care, but Medicare covers only short term care and not even all of that unless certain criteria are met. Myths abound in regards to Medicare and Medicaid and protecting your assets in the event that you or your spouse requires long term care.

There are steps you can take to protect a large amount of your assets but be aware that to qualify for Medicaid, you must disclose all financial transfers for a period of 3-5 years prior to application. There are penalties for illegal transfers. You can take out an insurance policy to cover some of the cost of long term care but most long term care insurance policies don’t cover the full cost of care. Many believe that setting up a “living trust” will secure their assets and make them untouchable but the truth is that these trusts don’t necessarily protect your assets from being paid out to your debtors.

Financial planning for elders is complicated and the earlier you start, the better. Consulting a financial planner who is well-versed in the laws of your state and the rules regarding Medicare and Medicaid is recommended. The time to take action to protect your assets is now.