A farm couple in their late 60s can have a paid-off operation, a healthy retirement account, and still be one hip fracture away from a financial crisis. Long-term care is the expense most families underestimate twice: they guess the price too low, and they guess how soon they'll need a plan too far off. By the time care starts, the options for paying for it have already narrowed. Treating long-term care as a funding decision you make in your 50s and 60s, not a scramble you handle in your 80s, is what separates families who stay in control of their assets from families who don't.
Here in Brookings, this conversation comes up constantly with farm families thinking about the next generation and with professional service owners planning their own retirement. It touches tax planning, entity structure, and often the same succession conversations we're already having about the operation itself.
Why the price tag catches families off guard
A private room in a South Dakota nursing home commonly runs $80,000 to $100,000 a year, and assisted living facilities in the $50,000 to $65,000 range are typical across the Midwest. In-home care, which most people say they'd prefer, still costs $25 to $30 an hour once you're paying for skilled help beyond a few hours a week. None of that is a one-time bill. Care for a spouse with a progressive condition can run five to eight years.
The number that surprises people most is what Medicare will not cover. Medicare pays for short-term rehabilitation after a hospital stay, not for ongoing custodial care. Medicaid does cover long-term care, but only after a person has spent down most of their countable assets, which for a farm family can mean selling land or liquidating an operation they spent decades building. That's the scenario every strategy below is designed to avoid.
Three ways to fund the cost, and what each one actually protects
Most families end up using some blend of three tools: long-term care insurance, VA benefits if a spouse or parent served, and self-funding from savings or farm assets. None of them is automatically the right answer. The right mix depends on age, health, military service, and how much of the family's net worth is tied up in land, equipment, or a business.
| Funding source | Best fit | Watch out for |
|---|---|---|
| Long-term care insurance | Healthy applicants in their 50s to early 60s | Premiums can rise; underwriting gets harder after a diagnosis |
| VA Aid and Attendance benefit | Veterans and surviving spouses meeting service and income tests | Application can take months; asset and income limits apply |
| Self-funding | Families with liquid savings or a plan to protect farm/business assets | Requires real numbers, not a guess, years before care starts |
Long-term care insurance locks in a benefit while you're still insurable. Premiums are lower and underwriting is far easier for a healthy 55-year-old than a 70-year-old with a recent diagnosis. The tradeoff is cost certainty going the other direction: premiums aren't guaranteed to stay flat, and policies bought decades ago sometimes come due for a real increase right when a client is on a fixed income.
Self-funding works when the numbers are run honestly. That means knowing your actual liquid net worth, not your net worth on paper once land and equipment are included, and building a reserve that could cover four to six years of care without forcing a sale of the operation. This is where the analysis overlaps directly with entity structure and multi entity farm tax strategy: how assets are titled and which entity holds them can determine whether a spouse's care costs put the whole operation at risk or just draw down a specific account.
The VA Aid and Attendance benefit most veteran families never apply for
If a veteran or their surviving spouse needs help with daily activities, the VA Aid and Attendance benefit (opens in new tab) adds a monthly payment on top of a standard VA pension, and it can be used toward in-home care, assisted living, or a nursing facility. Brookings County has a meaningful veteran population from decades of farm families with service history, and this benefit gets missed constantly, partly because the application requires documenting both wartime service dates and unreimbursed medical expenses correctly. Getting the paperwork right the first time matters, because a rejected application can add months to the wait while care costs keep accumulating.
Building the funding plan into your existing tax and succession strategy
The strongest long-term care plans don't exist in isolation. They get built alongside the tax and succession planning a family or business owner is already doing. Julie Underwood, CPA, works with agribusiness and professional service owners on exit and succession structures where long-term care funding is part of the same conversation: how ownership transfers, how a buyout is taxed, and how much liquidity a retiring spouse needs outside the business. Brandi Altstaetter works with multi-generational farm families on transition planning, where the question of who pays for Mom and Dad's care can otherwise turn into a fight between siblings who farm and siblings who don't.
A few of the medical costs tied to long-term care are deductible if they exceed 7.5% of adjusted gross income, including a portion of premiums for tax-qualified long-term care insurance based on age, as outlined in IRS Publication 502 (opens in new tab). That deduction alone won't fund a care plan, but it's worth building into year-round tax planning rather than discovering it in April.
This kind of planning also connects to broader financial-risk decisions families are already making, like whether they're carrying the right kind of and amount of coverage elsewhere. If you haven't looked at your overall insurance picture recently, our post on how much insurance coverage you actually need is a useful companion piece. And if unexpected medical costs in general are a worry, our piece on tax-advantaged planning against medical debt walks through HSA strategy that overlaps here too.
Common Questions
At what age should someone buy long-term care insurance? Most people get the best combination of price and approval odds between ages 55 and 65, while health is still strong. Waiting until a health event forces the issue often means higher premiums, exclusions, or an outright denial, so this is a decision that rewards planning years ahead rather than reacting to a diagnosis.
Can a farm or business be protected from long-term care costs? Often, yes, depending on how ownership is structured and how far in advance the planning starts. Entity structure, asset titling, and timing all matter, and Medicaid look-back rules mean transfers made too close to the need for care won't count. This is exactly the kind of planning we do alongside multi entity farm tax strategy work.
How much does the VA Aid and Attendance benefit actually pay? The amount depends on the veteran's or surviving spouse's specific circumstances, including marital status and unreimbursed medical expenses, and it's paid in addition to the base VA pension. Full eligibility rules and current payment details are on the VA's Aid and Attendance page (opens in new tab).
Is self-funding realistic without long-term care insurance? It can be, if the reserve is sized correctly and separated from farm or business capital that's needed to keep the operation running. A family that hasn't run those numbers is usually guessing at a figure that's too low, which is why this works best as part of a broader financial plan rather than a standalone decision.
If long-term care costs are part of a bigger conversation about your farm's succession, your business exit, or your family's overall tax strategy, contact us and we'll walk through what a realistic funding plan looks like for your situation.
