About 35% of people who reach age 65 will need nursing home care at some point in their lifetime, according to the National Association of Insurance Commissioners (NAIC). Since Medicare doesn't cover long-term care in nursing homes or assisted living facilities, most people end up funding at least some that care themselves.

Why Plan for Nursing Home Care?

Without careful retirement planning, financing long-term care could deplete your resources. Protecting your assets from nursing home costs requires you to navigate the various funding options and position yourself to take advantage when you need them.

According to the NAIC, the average nursing home stay is one year. The costs can add up quickly in that time: If you entered a nursing home today, that year alone might cost you more than $100,000, based on recent industry data.

Here are four strategies to prevent nursing home expenses from consuming your assets.

1. Get Ahead of Medicaid's Look-Back Rule

Medicaid pays for nearly a third of all U.S. nursing home care, according to the NAIC. Having that government program as an option can help you with protecting your assets from nursing home costs by reducing what you have to pay from your own funds. However, you may not initially qualify for Medicaid until you spend down some of your income.

To keep people from waiting until the moment just before applying for Medicaid to get rid of assets they could otherwise use to fund their own care, most states impose a five-year look-back rule. That means that, with a few exceptions, you won't qualify for Medicaid benefits if you've given away assets or sold them for less than their fair market value within five years of applying.

Learn Medicaid's eligibility rules and plan your spend-down strategy so that you are eligible for the benefits if you ever need them.

2. Gift Some Assets Without Penalty

Some asset transfers won't block your Medicaid eligibility under the look-back provision — even if the recipients paid little or nothing for them — because there is no requirement to liquidate the assets before you qualify. Examples include household goods, personal effects such as jewelry, and property that produces income.

Your primary residence is generally not included among the penalty-free gift items. A notable exception falls under Medicaid's Caregiver Child Exemption, which lets you transfer your home for less than fair market value to a child who lived in the home for at least two full years while caring for you.

Gifts between spouses are also exempt from Medicaid penalties, since the income of both spouses will be assessed if either of them applies to the program for long-term care.

3. Create an Irrevocable Trust

You can avoid having to use some of your assets to pay for nursing home care by placing them in an irrevocable trust. Once you set up this type of trust, only the beneficiaries or the independent trustee who manages it can grant permission to cancel or change it. Although you may still use the assets in the trust, you give up legal control of them.

As with other ways of spending down your assets, creating an irrevocable trust less than five years before entering a nursing home will trigger the Medicaid look-back rule.

4. Purchase Long-Term Care Insurance

Another method of protecting your assets from nursing home costs is to buy long-term care insurance. These insurance policies will pay for nursing home care, assisted living and other types of long-term care that Medicare doesn't cover.

One potential advantage of long-term care insurance is that, in some states, approved partnership policies can exempt you from the normal requirement to spend down your assets for Medicaid eligibility.

With these tips, you can begin creating a plan to access the resources to fund nursing home care should you ever need it. Although nursing home care can be expensive, the best way to protect your assets from this major expense is to be prepared.