No one likes to think about the possibility of needing long-term care, but the statistics tell a sobering story: nearly 70% of Americans turning 65 today will require some form of long-term care services during their lifetime. In New Jersey, where the costs of care rank among the highest in the nation—with nursing homes running upwards of $14,000 per month and climbing—failing to plan ahead can quickly devastate a family’s financial security. The good news is that, with proper planning, you can protect your assets, ensure quality care for yourself or a loved one, and preserve your legacy for the next generation. Whether you’re just beginning to think about these issues or facing an immediate need, understanding Medicaid eligibility, the five-year lookback period, and strategic planning options can make all the difference between financial catastrophe and peace of mind.
1. What Types of Long-Term Care Services Are Available?: When planning for long-term care, it’s important to understand the full spectrum of costs and care that are available to you. An array of options exists, including home health aides, assisted living facilities, nursing homes, and memory care.
- Home and Community-Based Care: Enables someone to live in their home with assistance from a home health aide and other professionals as necessary.
- Assisted Living Facilities: Offer an intermediate level of care and supervision, providing 24/7 staff on site, housing, and assistance with daily activities. Three meals a day are usually provided in a dining room that offers socialization with other residents and staff.
- Nursing Homes: Provide skilled nursing care around the clock to patients with significant medical needs.
- Memory Care Facilities: Provide 24/7 care and supervision for patients with Alzheimer’s or dementia.
2. Current Costs in New Jersey: Unfortunately, the price tag for long-term care in New Jersey is among the highest in the nation. With figures higher than ever before, it’s important to plan ahead.
- Home-Based Care Costs: Homemaker services are estimated around $7,400 per month, with home health aides running slightly higher at approximately $7,700 per month for a 44-hour week. Despite this potentially daunting figure, it is considerably lower than the nursing home alternatives.
- Assisted Living Costs: In New Jersey, assisted living averages $9,068 per month.
- Nursing Home Costs: A semi-private room ranges between $11,000–$12,000 per month. Private rooms cost between $14,000–$16,000 per month. Prices vary according to location.
- Memory Care Costs: Memory care costs range between $8,500 to $20,000 per month depending on the level and intensity of care.
3. Planning for Medicaid: The Five-Year Lookback: The State of New Jersey has a policy called the Lookback Rule. Reviewers screen a Medicaid applicant’s records for the previous five years. They examine transfers for less than market value, gifts, addition of names to bank accounts, and the creation of trusts. Transfers below fair market value may trigger a penalty period of ineligibility.
4. Protecting the Community Spouse: When one spouse enters a care facility, it’s important to protect shared assets. An estates and trusts professional can help retain the spousal home, vehicle, and a significant portion of income and countable assets under the Community Spouse Resource Allowance (CSRA).
5. Medicaid Trust Compliance: Estate planning professionals create compliant trusts such as irrevocable income-only trusts and pooled trusts. They will explain how they work, their advantages, limitations, and timing considerations related to the lookback period.
6. Exempt vs. Countable Assets: To qualify for Medicaid in New Jersey, an individual may not have more than $2,000 in countable assets. Exempt assets include prepaid funeral arrangements, personal belongings, one vehicle, and income-producing property necessary for support.
7. Spend-Down Strategies: Acceptable spend-down strategies include paying off debts, making home improvements, purchasing exempt assets, and addressing deferred maintenance. All purchases must be made at fair market value.
8. Medicaid Estate Recovery: After a Medicaid recipient dies, the state may seek reimbursement for benefits paid. An estate planner can help develop strategies to minimize recovery.
Read more about the Most Essential Estate Planning Documents.Â
9. Veterans Benefit Coordination: Veterans and surviving spouses may qualify for VA Aid and Attendance (A&A) benefits. In 2026, the maximum annual benefit is $29,093.
10. Recent Policy Changes and Planning Timing: An estates and trusts attorney can help you understand current Medicaid rules, recent federal policy changes affecting New Jersey, and why proactive planning is far preferable to crisis planning.
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