Most clients don't hear about the 5-year look-back period until it's time to qualify for Medicaid, and by then, it's already too late to do any proper Long-Term Care (LTC) Planning. A client or loved one suddenly needs LTC, assets weren't repositioned in time, and options evaporate — fast. Here's the reality…..The 5-year look-back isn't necessarily a problem unless it's ignored. However, engaging clients today, like the five-year clock is starting today, could be one of the most powerful LTC Planning triggers possible.

Medicaid Planning: The Common but Incomplete Strategy

For the advisory community and their clients, the "Medicaid planning" concept brings to mind legal maneuvers like asset transfers, irrevocable trusts, or crisis spend-downs. Elder law attorneys often deploy these tools when or after care is needed, so the focus shifts from proactive planning to reactive crisis management. But this approach is often:

• Focused on asset protection, not quality care, delivery of care, or where care is delivered.
• Emotionally and logistically stressful for adult children.
• Unpredictable, depending on evolving rules and enforcement of the 5-year look-back.

The bottom line? Medicaid planning can help shield what's left — but only after substantial estate erosion and loss of control.

The Better Strategy: Start the Look-Back To Fund An Insurance-Based LTC Plan

Instead of viewing the 5-year look-back as a limitation, flip the script and use it as a planning trigger. Right now, clients even as old as 80 can effectively reposition a portion of their assets into solutions that:

• Create multiples of those assets to cover Long-Term Care.
• Preserve control over care preferences.
• Protect legacy assets.
• Create tax-free benefits for care and their heirs.

Some of the most powerful tools are Asset-based LTC Planning solutions…..

Case Study:  Real-World Example for a Life/LTC Hybrid Policy for a 65-Year-Old Couple

Let's say a healthy couple, age 65, repositions $40,000 per year for five years ($200,000 total) into a joint Life/LTC hybrid policy. Here's a snapshot of what their guaranteed benefits look like:

• LTC Benefit Duration:  72 months of shared (indemnity) benefits

• Total initial benefits:  $612,994 @ $8,514/month

• Tax-Free Death Benefit (if care is not needed):  $306,497

• Cash Surrender Value at Year 15: Over $197,000

That $200,000 doesn't just sit on the sidelines. It becomes a client's leverage engine, creating 3x usable benefits while preserving flexibility, liquidity, and their legacy.