The Truth about Long-Term Care in Colorado
The Truth About Long-Term Care in Colorado: How Real Estate Entrepreneurs Can Protect Their Legacy
If you’re building a real estate portfolio to create long-term wealth, protect your family, or eventually retire on your own terms, one threat could quietly unravel everything you’ve built: the cost of long-term care.
In Colorado, the average cost of nursing home care exceeds $110,000 per year, and in-home care is often even more expensive. Without proper planning, your investment properties, retirement accounts, and even your primary residence could be vulnerable.
Let’s bust the Top 10 Myths About Long-Term Care—and explore the real strategies Colorado investors can use to protect their assets, minimize taxes, and preserve generational wealth.
Myth #1: “I won’t need long-term care.”
Truth: Over 70% of Coloradans age 65+ will need some form of long-term care. Thanks to modern medicine, people are living longer—but not always healthier. Without a plan, you’re gambling with your estate.
Myth #2: “My family will care for me at home.”
Truth:
- Caregiving takes a heavy emotional, physical, and financial toll.
- According to AARP, a caregiver over 50 who leaves work to help a parent may lose over $300,000 in income and retirement benefits.
- Most in-home care is temporary. Many still end up needing full-time nursing facilities or memory care.
Myth #3: “I can afford it.”
Truth:
- The average nursing home in Colorado now costs $9,500/month and rising.
- If you need care for 5–8 years (common with Alzheimer’s or Parkinson’s), you could spend $750,000–$1M+, especially if your spouse also needs care later.
- Even if you can afford it, that money may be better used for your spouse’s lifestyle, future generations, or reinvestment—not private-pay nursing care.
Myth #4: “Medicare will cover it.”
Truth:
Medicare and Medigap only pay for up to 100 days of skilled nursing after a qualifying hospital stay. They don’t cover custodial care—what most people need long-term.
In Colorado, Health First Colorado (our state Medicaid program) is the only public option that covers long-term care beyond the short term—but you must qualify both medically and financially.
Myth #5: “I won’t qualify for Medicaid in Colorado.”
Truth:
- To qualify for Health First Colorado – Long-Term Services and Supports (LTSS), your income and assets must fall below strict thresholds (as of 2025: ~$2,000 in countable assets and ~$2,800/month in income).
- However, with the right legal strategies, real estate investors can qualify while legally protecting key assets.
- Owning a primary residence (up to ~$713,000 equity in 2025) does not automatically disqualify you—but it may be subject to estate recovery later if not planned correctly.
Myth #6: “My home is exempt, so my family will inherit it.”
Truth:
- The State of Colorado may place a Medicaid Estate Recovery claim on your home after your death (or your spouse’s), effectively clawing back long-term care costs.
- Rental properties and investment income count against eligibility unless repositioned in advance through planning tools like irrevocable trusts.
Myth #7: “I’ll just gift my assets to my kids.”
Truth:
- Gifting directly to your children exposes your wealth to their risks: divorce, creditors, lawsuits, or premature sale with heavy capital gains taxes.
- A smarter approach: the Colorado Medicaid Asset Protection Trust (MAPT) or Family Protection Trust—which shields assets while keeping them in the family and potentially providing a step-up in basis.
Myth #8: “Irrevocable trusts are too rigid.”
Truth:
In Colorado, properly structured trusts:
- Allow you to retain lifetime use of your home or rental income (without direct access to principal).
- Can be modified or revoked with consent of beneficiaries.
- Keep assets off the books for Medicaid and protect them from estate recovery—without triggering immediate gift taxes or loss of control.
Myth #9: “If I’m already in poor health, it’s too late.”
Truth:
- Even if you’re already in a facility or facing declining health, strategic gifting or asset repositioning can still protect some of your estate—but only if your planning documents are set up properly.
- Colorado’s Medicaid rules penalize last-minute transfers—so timing is critical.
Myth #10: “I can wait and plan later.”
Truth:
- Colorado applies a 5-year “lookback period” on gifts and transfers before qualifying for Medicaid.
- The sooner you act, the more options you preserve.
- Setting up protective trusts or repositioning assets now starts the clock and avoids crisis-mode decisions later.
✅ What Colorado Real Estate Investors Should Do Now
You have 4 options:
- Do nothing and risk spending down your estate.
- Rely on traditional LTC insurance—if you qualify and can afford it.
- Attempt last-minute gifting, hoping for Medicaid-friendly results.
- ✅ Plan proactively with trusts, tax strategies, and estate documents that protect your real estate holdings.
If you own rental properties, a primary residence, or any appreciable assets—now is the time to build long-term care into your wealth strategy.
Get Expert Help:
Speak with an estate planning attorney who understands both Colorado Medicaid rules and real estate asset structures. Ask about:
- Colorado-specific Family Protection Trusts
- Medicaid-compliant gifting strategies
- Long-term care insurance options
- Preserving 1031 exchange eligibility
- Tax advantages of asset repositioning
Want help connecting with the right planner or getting started?
Join ICOR at Colorado RECON Fall 2025 for a deep dive into advanced wealth planning and preservation strategies, based on recent updates and strategies that our subject matter experts will help you implement to save $60,000+ annually. For more information, visit, www.ICORockies.com/events and join me Saturday, September 20th!