Long-term care expenses are one of the most underestimated threats to retirement security. For Jim and Laura (names anonymized) —a retired couple with a net worth of nearly $3 million—a projected 10-year care event stood to cost $1.46 million and reduce their estate to just $500,000. By combining asset protection trusts with a guaranteed income annuity, they preserved $2.8 million: five times more than if they had done nothing at all.

This case study walks through exactly how that outcome was achieved—and what it meant for their financial future. Contact our team at DuPont Law Group to learn more about how one couple protected nearly $3 million from long-term care costs.

Who Are Jim and Laura?

Jim (72) and Laura (70) are a retired couple who, by most measures, had done everything right. They saved diligently, invested wisely, and built a comfortable retirement with a combined net worth of nearly $3 million. Their assets included:

• Retirement accounts and investment portfolios
• A vacation condo in Florida
• A mix of fixed annuities and brokerage holdings

On the surface, their financial picture looked strong. But one risk had gone unaddressed: what would happen to their estate if one of them needed long-term care?

Based on their health history, we modeled a 10-year care event beginning in 2027 at a projected cost of $1.46 million. Without a plan, that single event had the potential to undo decades of careful saving.

The Four Scenarios: What Happens Without a Plan—and What Happens With One

To find the right solution, four distinct planning scenarios were modeled and compared.

Scenario 1: Baseline — Do Nothing

Without any changes, Jim and Laura’s net worth would fall from $2.97 million to just $500,000 after the care event. Decades of saving, wiped out in a single extended illness.

Scenario 2: Transfer the Florida Condo to an Irrevocable Trust

Moving the vacation condo into an irrevocable trust offered some protection, preserving approximately $850,000—an improvement of $350,000 over the baseline, but still far short of their full estate.

Scenario 3: Move Investments and Existing Annuity to a Trust

Placing their brokerage account and existing fixed annuity into a trust significantly improved the outcome, preserving $1.73 million.

Scenario 4: Annuity + Trust Strategy (Recommended)

The most effective approach combined two tools: moving $600,000 from an IRA into a joint lifetime income annuity, while simultaneously transferring the Florida condo and investment assets into trust. The result was the preservation of $2.8 million—a difference of $2.3 million over the baseline scenario.

This strategy also reduced annual withdrawals from retirement accounts and extended the longevity of Jim and Laura’s retirement funds by two full years.

Why Did the Annuity and Trust Strategy Work So Well?

The annuity and trust strategy succeeded because it addressed two separate problems at once.

The income annuity converted $600,000 from an IRA into a guaranteed stream of lifetime income for both Jim and Laura. This created a reliable income floor that covered living and care expenses without forcing large withdrawals from their investment portfolio. If care costs arrived, the portfolio wasn’t the first line of defense—the annuity was. That protection alone significantly reduced the financial strain on their broader estate.

The irrevocable trust shielded the condo and investment assets from direct exposure to care-related costs. Assets held inside an irrevocable trust are no longer considered personal property in the same way, which can reduce what is counted as available resources in certain planning contexts.

Together, these two strategies created a layered defense: guaranteed income to cover costs as they arose, and protected assets that remained intact for their legacy.

What This Means for Central Ohio Families

Long-Term Care Is the Silent Threat Most Families Don’t Plan For

Most people don’t realize how quickly long-term care costs can accumulate. According to industry projections, the average cost of nursing home care exceeds $100,000 per year—and for couples where one spouse requires extended care, the financial impact can be devastating for the spouse who remains at home.

Jim and Laura’s case illustrates a scenario that plays out for thousands of Ohio families every year. A $1.46 million care event is not an extreme outlier. It is an entirely realistic projection for a 10-year care event in today’s cost environment. Without planning, even a $3 million estate is not safe.

The good news is that with the right structure in place, that risk can be dramatically reduced—or, as Jim and Laura’s case shows, nearly eliminated.

Trusts Can Provide Real, Meaningful Protection

An irrevocable trust is one of the most powerful tools available for long-term asset protection. When assets are properly transferred into an irrevocable trust, they are no longer directly accessible as personal resources in the same way they would be otherwise. This structural shift can protect real property, investment accounts, and other assets from being consumed by extended care costs.

Importantly, trust planning must be done in advance. Most asset protection strategies require that assets be placed in trust well before a care event occurs. Waiting until a health crisis arises is often too late to take full advantage of these tools. The earlier a trust is drafted and funded, the stronger the protection it provides.

Proper trust funding—making sure assets are actually titled in the name of the trust, not just that a trust document exists—is one of the most commonly overlooked steps in estate planning. A trust that exists on paper but holds no assets provides no protection.

Income Annuities Reduce Portfolio Stress During a Care Event

A guaranteed lifetime income annuity serves a specific and valuable function in long-term care planning: it creates a predictable income stream that covers ongoing expenses without drawing down investment assets. When a care event occurs, costs compound. Without a dedicated income source, families are forced to liquidate investments, often at the worst possible time.

By converting a portion of retirement savings into guaranteed income, Jim and Laura ensured that the annuity absorbed the cost of care, while the rest of their estate remained intact. The annuity also provided a secondary benefit: by reducing the annual withdrawals needed from their retirement accounts, it extended the life of those accounts by two years—a meaningful gain in long-term financial security.

For retirees who are concerned about outliving their money, this kind of guaranteed income floor is not just a long-term care tool—it is a fundamental component of retirement stability.

Every Family’s Situation Is Different—and Every Plan Should Reflect That

Jim and Laura’s strategy was not a one-size-fits-all solution. It was built around their specific assets, their health outlook, their retirement timeline, and their legacy goals. A different couple with different assets and a different health history might arrive at a different optimal strategy—perhaps a long-term care insurance policy, a hybrid annuity product, or a different trust structure.

What remains constant across every case is this: the families who protect their estates most effectively are the ones who plan before a crisis occurs. The right combination of tools, applied at the right time, can mean the difference between a depleted estate and a secure legacy.

 Frequently Asked Questions About Long-Term Care Planning

Q: At what age should I start planning for long-term care?

A: Long-term care planning is most effective when started in your 50s or early 60s, while you are still in good health and have access to the full range of planning tools. Waiting until health issues arise can limit your options significantly. That said, planning at any age is better than not planning at all—speak with a trusted estate planning attorney to understand what strategies are still available to you.

Q: Does Medicare cover long-term care costs?

A: Medicare provides only limited coverage for short-term skilled nursing care and does not cover custodial or long-term care expenses. Medicaid may cover long-term care for those who qualify financially, but eligibility rules are complex and asset thresholds are strict. Proactive planning—such as the trust and annuity strategies used in Jim and Laura’s case—can help protect your assets while preserving options.

Q: Can I protect my home from long-term care costs?

A: Yes, in many cases. Transferring a primary residence or vacation property into an irrevocable trust is one strategy used to protect real estate from being consumed by care costs. However, timing matters—most strategies require assets to be placed in trust at least 5 years before a care event. A trusted estate planning attorney can assess your specific situation and advise on the most effective approach.

Q: What is the difference between a revocable trust and an irrevocable trust for long-term care planning?

A: A revocable trust allows you to retain control over the assets and change the trust at any time—but because you maintain control, the assets are still considered available resources for long-term care purposes. An irrevocable trust, by contrast, transfers ownership of the assets out of your direct control, which is what makes it effective for asset protection. Each has a different role in estate planning, and many comprehensive plans include both.

Take the First Step Toward Protecting Your Family

Jim and Laura’s case makes one thing clear: the cost of long-term care is real, it is significant, and it is entirely possible to plan for it. With the right legal structure, the right financial tools, and the right team coordinating both, a projected $1.46 million threat was reduced to virtually no financial impact at all.

Whether you are approaching retirement, already retired, or planning ahead for a spouse or aging parent, the time to act is now—before a health event forces your hand.

Contact DuPont Law Group today to schedule a consultation and find out which long-term care protection strategies are right for your family.