When you think about estate planning, your primary focus may be protecting your assets, providing for your loved ones, and ensuring that your wishes are honored after your death. Although these are important objectives, a comprehensive estate plan should also address the possibility that you will need expensive long-term care during your lifetime. Without adequate preparation, nursing home expenses and other long-term care costs could consume a substantial portion of the wealth you have accumulated, leaving considerably less for your spouse and other beneficiaries. In Massachusetts, MassHealth planning can help you prepare for these expenses while also protecting your financial security and preserving your estate assets. With that in mind, the attorneys at Legacy Care Law Firm explain why MassHealth planning should be part of your Massachusetts estate plan.
Understanding the Relationship Between MassHealth and Estate Planning
MassHealth is the Massachusetts Medicaid program that provides health coverage to eligible residents, including seniors and individuals who require long-term care services. Unlike Medicare, which primarily provides health insurance based on age or disability, MassHealth is a needs-based program with financial eligibility requirements that vary depending on the type of coverage requested. For seniors who require ongoing assistance, MassHealth may help pay for nursing facility care and certain home and community-based services if you need assistance with activities of daily living, such as bathing, dressing, eating, or moving safely around your home.
While traditional estate planning focuses primarily on determining what happens to your assets when you die, MassHealth planning addresses what happens to those assets if you require several years of expensive health care before your death. By incorporating MassHealth planning into your Massachusetts estate plan, you can explore strategies designed to preserve your resources, maintain eligibility for appropriate benefits, and reduce the financial burden on your family.
The Rising Cost of Long-Term Care in Massachusetts
Massachusetts consistently ranks among the most expensive states for nursing home care, with the average annual cost of long-term care exceeding $180,000 as of 2026. Even if you have accumulated substantial retirement savings, paying for several years of long-term care (LTC) could significantly diminish your financial resources. Without appropriate planning, the financial consequences of a length LTC stay could threaten your family’s financial security. Incorporating MassHealth planning into your estate plan allows you to consider these potential expenses before they become an immediate financial crisis.
Why Medicare and Private Health Insurance May Not Be Enough
People often make the common mistake of assuming that Medicare will cover their long-term care expenses after retirement. Although Medicare may cover many of your healthcare expenses as a senior, it does not pay for extended long-term nursing home care. The same applies to most private health insurance policies unless you purchased separate long-term care insurance when you were younger because purchasing LTC insurance later in life can be costly.
MassHealth can provide an important alternative for individuals who meet the applicable eligibility criteria. Consequently, preparing for possible MassHealth eligibility should be part of your overall retirement and estate planning strategy, even if you currently have adequate income and savings.
Understanding MassHealth Eligibility Requirements in 2026
Because MassHealth is a needs-based program, qualifying for long-term care assistance requires meeting both financial and medical eligibility criteria. Your income, assets, marital status, and the type of services you require can all affect your eligibility.
For 2026, a single Massachusetts resident applying for nursing home MassHealth must have no more than $2,000 in countable assets and must require a nursing home level of care. Although Massachusetts has no fixed income ceiling for this category of institutional coverage, most of the recipient’s monthly income is typically required to be contributed toward the cost of care. Different requirements apply to other MassHealth programs. For example, certain Home and Community-Based Services waivers have a monthly income limit of $2,982 for an individual in 2026, along with applicable asset and medical eligibility requirements.
MassHealth also distinguishes between countable and non-countable assets. Bank accounts, investment accounts, additional real estate, and many retirement accounts are generally countable resources. Your primary residence, one vehicle, personal belongings, and certain burial arrangements may be excluded under applicable conditions.
Why the Five-Year MassHealth Look-Back Period Makes Early Planning Essential
One of the most important reasons to incorporate MassHealth planning into your Massachusetts estate plan is the five-year look-back period. When you apply for MassHealth, your financial transactions occurring during the preceding 60 months will be reviewed to look for assets transferred for less than fair market value. If an asset transfer is identified, MassHealth may impose a period of ineligibility because you transferred assets during the look-back period. The length of the penalty depends on the value of the disqualifying transfer and the average cost of monthly care in your area. During the penalty period, you may be responsible for paying your long-term care expenses without MassHealth assistance.
Planning at least five years before you anticipate needing long-term care can provide significantly more opportunities to protect assets without creating disqualifying transfers. Although planning remains possible when care is imminent, the available strategies become more limited.
Using Trusts to Protect Assets While Planning for MassHealth
Trusts can play an important role in coordinating your estate planning and MassHealth objectives, but the type of trust you establish and the rights you retain over its assets are critical. Although a revocable living trust can help your estate avoid probate and provide continuity in asset management if you become incapacitated, the fact that you retain the authority to revoke the trust and access its assets means that those assets remain countable for MassHealth eligibility purposes. Conversely, an appropriately structured irrevocable Medicaid Asset Protection Trust can provide asset protection without interfering with MassHealth eligibility. When you establish this type of trust, you transfer designated assets into the trust and relinquish certain rights over the property. A Trustee then manages the assets according to the trust agreement terms and the assets may eventually pass to your beneficiaries. If the trust is properly drafted and the applicable look-back period has been satisfied, the transferred assets may be excluded from your countable resources for the purpose of MassHealth eligibility as well as Medicaid (MassHealth) estate recovery.
Can We Help You Incorporate MassHealth Planning into Your Massachusetts Estate Plan?
For more information, please join us for an upcoming FREE seminar. If you would like assistance incorporating MassHealth planning into your Massachusetts estate plan, contact our estate planning attorneys in our North Andover, Woburn, and Beverly offices at (978) 969-0331. Our Salem and Nashua, New Hampshire office can be reached at (603) 894-4141.
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