The biggest threat my clients often face is the looming and uncertain possibility of long-term care costs.

The cost can easily exceed $100,000 per year. This is why approximately 70 percent of older Americans in need of long-term care are on Medicaid.

In order to qualify for Medicaid, you need, among other things, to have less than a certain amount of countable assets. Your primary residence is not counted as a resource.

The rationale is that the state can come back and seek recovery against your estate by taking your house. If this happens, your children or other loved ones will NOT get your home.

What can you do to preserve your home for your children or other loved ones? You can deed away your future interest in your home now to your kids or to a trust for their benefit.

If you do this five years before you need Medicaid and the house is paid off, and you will not need to do a reverse mortgage, then the state will NOT be able to get your home.

Why? The interest the state may seek in estate recovery (your future interest) was already given away five or more years ago. Result? There is nothing for the state to get, so your kids get the house free and clear.

If you own your home with no mortgage, you own it now and forever. This strategy has you giving away your “future” interest.

You will keep a life estate for your whole life. You will keep the 4 percent special assessment and homestead exemption, and the full and absolute right to live in the home and to get rents from it while you’re living.

This strategy or plan is a very powerful and effective strategy for those with a debt-free home and who wish to make sure their loved ones inherit something in light of the threat of long-term health care costs.

If not planned for, your loved ones might inherit nothing.

You should also have your general power of attorney authorize Medicaid planning so your agent can fill out applications and take steps to preserve your property.

Also, it is worth looking into a life insurance policy with a long-term care rider.

As always, a little bit of planning can make a big difference.

Mark F. Winn, J.D., Master of Laws (LL.M.) in estate planning, is a local asset protection, estate and elder law planning attorney.