The decision to move a vulnerable loved one into a nursing home or other type of long-term care facility is a big one. It also carries the potential for high financial stakes. Many people and families in Arkansas are shocked to learn the out-of-pocket cost of nursing home care. You do not want to lose your life savings to a nursing home. With a proactive approach, there are strategies that you can use to preserve wealth and protect assets. At McClelland Law Firm, P.A., we are leaders in long-term care planning. Our Arkansas Medicaid crisis planning attorney offers asset protection strategies that every family should be aware of.
Background: Nursing Home Care is Extremely Expensive
Could you really lose it all to a nursing home? For many people and families in Arkansas, the answer is, unfortunately, “yes.” Nursing home care is shockingly expensive. U.S. News and World Report now puts the average nationwide cost of a private room in a nursing home at above $10,000 per month. Semi-private rooms are only slightly less. For many families, these expenses can deplete life savings extremely quickly. You need a plan for long-term care needs.
Medicaid Provides Coverage (But Only With Financial Need)
What about Medicare? It is a common question, but unfortunately, it is not the answer. Medicare provides only limited coverage for skilled nursing (typically up to 100 days of rehabilitative care for certain qualifying situations. In other words, Medicare does not cover most nursing home care and long-term care. Instead, Medicaid is the public program that provides financial support. That is a very important difference. Medicaid is a means-tested program jointly funded by the federal government and the State of Arkansas.
To qualify for long-term care benefits, an applicant must meet strict income and asset limits. As of 2025, an individual applicant in Arkansas generally cannot have more than $2,000 in countable assets. Certain property, such as a primary residence, personal belongings, and one vehicle, may be exempt under 42 U.S.C. § 1396p(a) and related Arkansas Department of Human Services (DHS) regulations. Still, you cannot have many assets to qualify for Medicaid coverage for a nursing home.
What if Your Assets or Income is Too High? If an applicant’s assets exceed these limits, they must “spend down” before qualifying for Medicaid. A spend-down must comply with federal and state transfer rules. Under 42 U.S.C. § 1396p(c), the “look-back period” extends five years (60 months) from the date of the Medicaid application. Any gifts or transfers made for less than fair market value during that time can trigger a penalty period of ineligibility. In other words, the government will make you use all of your non-exempt assets first to pay for nursing home care before it steps in.
Asset Protection Strategies Every Family in Arkansas Should Know
Thinking about the cost of future nursing home care needs can be stressful, frustrating, and overwhelming. There is some good news: With the right strategy, you can protect assets from nursing homes. Options are available for people and families in Arkansas, but you need to be proactive. Here are asset protection strategies that every family in Arkansas should know about:
- A Medicaid Asset Protection Trust (MAPT): Trusts can be the answer for many families. A MAPT allows families to transfer ownership of certain assets (such as real estate, savings, or investment accounts) into an irrevocable trust. The trust is structured so that the creator (the “grantor”) no longer legally owns the assets for Medicaid eligibility purposes. If properly established and funded more than five years before a Medicaid application, assets in the trust are excluded from the countable resource total.
- Purchase Exempt Assets Before Applying: Families can legally convert countable assets into exempt ones before applying for Medicaid. For example, paying off a mortgage, making home repairs, or purchasing a new vehicle may reduce countable resources while preserving total household value. However, there will be a lookback at any transaction. For that reason, it is imperative that these transactions are properly documented to satisfy Medicaid review. An Arkansas long-term care planning attorney can help.
- Spousal Resource Allowance (Community Spouse Protection): Federal and state Medicaid rules allow for the protection of a portion of the couple’s combined resources for the non-institutionalized spouse. Under federal law and corresponding Arkansas DHS guidance, the community spouse may retain a “Community Spouse Resource Allowance” (CSRA). In 2025, it can be as high as around $154,000. It is an important option for a spouse.
- Consider a Caregiver Agreement: A caregiver agreement allows a family member to be compensated for providing personal care services under a written contract. Payments under such agreements must reflect fair market value for services rendered and be supported by contemporaneous records. If drafted correctly, caregiver payments may reduce countable assets without violating Medicaid transfer prohibitions.
Why Trust Our Arkansas Long-Term Care Attorney
As the cost of long-term care in Arkansas can be jaw-droppingly expensive, it is imperative that you and your family have a proactive strategy to protect assets. Wealth preservation is one of the most important aspects of estate planning and elder law. At McClelland Law Firm, P.A., we are a law firm that helps people and families protect their hard-earned life savings from the risks posed by nursing home costs and other long-term care costs. Personalized legal representation is a must. Your initial consultation with our Arkansas long-term care planning lawyer is fully confidential.
Call Our Arkansas Long-Term Care Planning Lawyer Today
At McClelland Law Firm, P.A., our Arkansas long-term care planning attorney is skilled, experienced, and committed to delivering results. If you have any questions or concerns about long-term care planning, we are here to help. Please do not hesitate to contact us for a completely confidential, no obligation initial consultation. With an office in Little Rock, Sherwood, Benton, and Searcy, we provide long-term planning services throughout the region in Northwest Arkansas.