The 7 Biggest Mistakes Families Make with Long-Term Care Planning (and How to Avoid Them)

For many families in California, long-term care is no longer a distant possibility, it’s an urgent reality. With the rising costs of nursing homes, assisted living, and in-home care, planning ahead is essential. Yet too many families delay taking action until it’s too late, which often results in drained savings, unnecessary stress, and lost opportunities for asset protection.

Long-term care planning is more than just preparing for medical expenses; it’s about preserving dignity, protecting assets, and ensuring loved ones receive the care they deserve. Unfortunately, common mistakes derail families every day. Here are seven of the most damaging errors and how you can avoid them.

Mistake #1: Waiting Too Long to Plan for Care

Many people assume they can wait until care is needed before they begin planning. But this is one of the costliest assumptions a family can make.

Delaying planning often means families must spend down assets quickly to qualify for Medi-Cal, leaving little behind for spouses or children. In contrast, early planning allows for the creation of trusts and other strategies that protect wealth while still ensuring eligibility for benefits.

Pro tip: The earlier you start, the more options you have. Even if you’re healthy today, developing a plan can save tens of thousands of dollars in the future.

Mistake #2: Assuming Medicare Will Cover Nursing Home Costs

One of the most widespread misconceptions is believing Medicare will handle the costs of long-term care. In reality, Medicare provides very limited coverage: typically up to 100 days of skilled nursing care following a hospitalization. After that, families are on their own.

This misunderstanding leaves many seniors and their families scrambling when they receive their first full bill for a nursing home stay. In California, the average annual cost of nursing home care exceeds $120,000. Without planning, that burden often falls directly on the family.

Key takeaway: Medicare is not a long-term care solution. Families must explore alternatives such as long-term care insurance, Medi-Cal planning, or establishing asset protection trusts.

Mistake #3: Not Protecting Assets Before Applying for Medi-Cal

Medi-Cal can be a lifeline for California seniors, but qualifying is not as simple as filling out a form. Without proper planning, families risk spending down almost all their assets before eligibility is granted.

For example, gifting assets to children right before applying can trigger penalties and disqualification periods. The program has strict look-back rules that penalize last-minute transfers.

What works instead:

• Establishing irrevocable Medi-Cal trusts well before care is needed.
• Converting countable assets into exempt ones, such as certain types of home improvements.
• Consulting an elder law attorney to create a compliant, long-term strategy.

By planning ahead, families can avoid losing their entire life savings to nursing home costs.

Mistake #4: Relying Only on Family Caregiving

While many families intend to provide care for aging parents or spouses at home, this plan often falls apart under the weight of reality. Caregiving is emotionally and physically exhausting, and few families are prepared for the financial toll it can take.

According to the AARP, unpaid family caregivers provide over $600 billion worth of care each year in the U.S. The hidden costs include lost wages, reduced retirement savings, and caregiver burnout.

Case in point: A daughter may promise to take care of her aging mother, only to realize that round-the-clock care is impossible while balancing her own job and children. Without additional support, both mother and daughter suffer.

Better approach: Create a plan that incorporates professional caregiving resources, respite care, and financial strategies so families are not left carrying the burden alone.

Mistake #5: Overlooking Legal Documents Like Powers of Attorney

Even families who prepare financially often overlook crucial legal documents. Without durable powers of attorney for finances and healthcare, decisions about medical treatment and asset management may end up in court.

This lack of preparation can result in unnecessary delays, court-appointed guardianship, or family disputes. The solution is straightforward: work with an attorney to draft legally binding documents that designate trusted individuals to act on your behalf if you become incapacitated.

Key documents to include:

• Durable Power of Attorney (financial decisions)
• Advance Healthcare Directive (medical decisions)
• HIPAA Authorization (access to medical records)

These documents provide peace of mind that decisions will remain in trusted hands, not left up to the courts.

Mistake #6: Choosing the Wrong Type of Care Facility

Not all care facilities are created equal. Some families prioritize convenience or cost over quality, only to later regret the decision. Others may not understand the difference between assisted living, skilled nursing, memory care, and in-home care services.

Choosing the wrong facility can result in inadequate care, unnecessary expenses, or even health risks for loved ones.

How to avoid this:

• Visit multiple facilities before making a decision.
• Ask detailed questions about staff training, patient-to-staff ratios, and specialized programs (such as dementia care).
• Review state inspection reports and testimonials.

The right facility not only ensures quality care but also helps families avoid financial and emotional strain down the road.

Mistake #7: Failing to Work with an Elder Law Attorney

Perhaps the most damaging mistake is trying to navigate long-term care planning without professional guidance. The laws governing Medi-Cal eligibility, asset transfers, and estate planning are complex, and mistakes are often irreversible.

An elder law attorney helps families:

• Protect assets while maintaining eligibility for Medi-Cal.
• Draft and update estate planning documents.
• Navigate the probate process if necessary.
• Anticipate long-term care needs and create sustainable solutions.

Example: A family that waits until a parent is already in a nursing home may be forced to spend down assets. By contrast, those who consult with an attorney years in advance often preserve most of their estate while still securing care.

Conclusion: Planning Today Protects Tomorrow

Long-term care planning is not just about money, it’s about peace of mind, dignity, and security for your family. By avoiding these seven common mistakes, families in California can protect their assets, ensure quality care, and reduce stress during some of life’s most challenging moments.

Whether you are decades away from retirement or already facing decisions about nursing home care, the time to act is now. With the guidance of an experienced elder law attorney, you can create a plan that safeguards your legacy and provides comfort to your loved ones when they need it most. Take the first step and book a free call with Amy Hsiao today.