Tennessee Wealth Protection: A Strategic Approach to the State’s Rising Long-Term Care Costs

Long-term care represents one of the most significant unplanned financial risks to a family’s security and legacy.

For Tennessee residents, the average cost of three years of care, projected at $292,332 in 2024, is anticipated to nearly double to over $581,682 by 2044. This isn’t meant to scare you—it’s meant to prepare you.1  

Proactive planning is essential to prevent these escalating costs from forcing a last-minute liquidation of assets intended for your heirs and help ensure that a lifetime of savings doesn’t become a crisis expense.

The LTC Landscape 

Someone turning 65 today has nearly a 70% chance of eventually needing some form of long-term care services and support in their remaining years.2 Many families assume Medicare will cover it, but Medicare is not long-term care insurance. 

Medicare only covers short-term, medically necessary care, such as a rehabilitation stay in a skilled nursing facility for a maximum of 100 days following a qualifying hospital stay. It does not cover custodial care—the ongoing assistance with daily activities (dressing, bathing, eating) that most seniors require.

For context, let’s take a closer look at Tennessee-specific services: 

• Home Health Aide: The national median cost for a home health aide is about $6,483 per month, and the Tennessee median sits slightly lower at approximately $5,911 per month.3
• Tennessee’s Medicaid Program: TennCare CHOICES covers long-term services and supports for those who meet strict financial eligibility limits (countable assets generally must be below $2,000 for a single person).4
• The Estate Recovery Threat: If TennCare pays for your long-term care after age 55, the state is required by federal law to seek reimbursement from your estate after your death. This process, known as Estate Recovery, can place a claim on assets, including your family home, potentially undermining your carefully constructed legacy.5

Strategic Solutions to Protect Your Wealth

A lengthy, unexpected care event can significantly impact your wealth and legacy goals. Here are some strategies that could help prevent legacy erosion: 

1. Early Financial Forecasting 

Time is your most powerful asset. We help clients model different care scenarios to determine the potential impact on their overall financial longevity. This proactive modeling is a financial fire drill, not a crisis intervention, and it informs every subsequent decision.  

2. Long-Term Care Insurance Options

• Traditional LTC Policies: Designed solely to cover long-term care costs.
• Hybrid Life/LTC Policies: These are popular among affluent clients because they combine a life insurance death benefit with long-term care coverage. If you need the care benefits, you use them; if you don’t, the death benefit passes to your heirs.

3. Strategic Medicaid Planning

• The Five-Year Look-Back: Tennessee strictly enforces a 60-month look-back period. To protect assets using tools like Irrevocable Medicaid Asset Protection Trusts (MAPTs), the transfer of assets must happen well in advance of the potential need for care. This is a five-year countdown to asset safety.
• Legal Coordination: All trusts and asset transfers mentioned here must be established, advised upon, and monitored by a qualified elder law attorney.

4. Tax-Efficient Funding

• Health Savings Accounts (HSAs): Contributions can be tax-deductible, funds grow tax-free, and withdrawals for qualified medical and LTC expenses are tax-free (the triple tax benefit).
• Roth Conversions: Strategic conversions may ensure that funds drawn later for care expenses—or passed to heirs—are tax-free. They can also reduce the size of your required minimum distribution (RMD) taxable future income.
• Tax Professional Mandate: Always consult with your CPA or a qualified tax professional to understand the tax implications of HSA contributions, Roth conversions, and LTC premium deductibility for your financial profile.

SageSpring’s Coordinated Approach

Long-term care planning involves overlapping domains: finance, insurance, taxes, and law. A fragmented plan leaves holes, but an integrated strategy can provide certainty and peace of mind.

At SageSpring we help ensure your plan is secured by coordinating your external professional team—your SageSpring advisor, your CPA, and your estate planning attorney—into a cohesive unit. This integrated strategy aims to provide a cohesive, resilient strategy. Contact our Tennessee team to learn more. 

This document does not constitute advice or a recommendation or offer to sell or a solicitation to deal in any security or financial product. It is provided for information purposes only and on the understanding that the recipient has sufficient knowledge and experience to be able to understand and make their own evaluation of the proposals and services described herein, any risks associated therewith and any related legal, tax, accounting or other material considerations. To the extent that the reader has any questions regarding the applicability of any specific issue discussed above to their specific portfolio or situation, prospective investors are encouraged to contact SageSpring or consult with the professional advisor of their choosing.

Sources: 

1. ACACIA Insurance. Tennessee Long-Term Care Costs. (2024).
2. National Council on Aging. When Should You Start Investing in Long-Term Care Insurance? (Aug 8, 2024). 
3. CareScout. Calculate the cost of long-term care near you. (2025).
4. TN.gov Division of TennCare. CHOICES. (2025).
5. TN.gov Division of TennCare. Estate Recovery. (2025).

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