Do You Know Whether You Need Estate or Medicaid Planning?

Do You Know Whether You Need Estate or Medicaid Planning?

Aging AnswersBy Laurie Steiner

Most people don’t know the difference between estate planning and Medicaid planning. People might think they need to protect assets from the nursing home and find out they really need new wills, trusts and powers of attorney — or the other way around.

Get Affairs in Order

Estate planning is the process of providing for yourself and your family in the event of your retirement, disability or death. Through a properly crafted estate plan, you put your legal and financial affairs in order so that the assets you have accumulated during your lifetime will be preserved and transferred to your heirs with the least amount of financial and emotional cost.

The most common estate planning tools available include a will, a trust, a durable power of attorney, a health care power of attorney and a living will declaration. This encompasses sitting down with your family to plan some of the most important issues you face. For example, questions are answered such as: Who will handle your affairs when you are incompetent or after death? How do you want to pass your assets to the next generation?

What kinds of medical treatment do you want or don’t want at end of life? You also have to plan to minimize or eliminate federal estate taxes and not leave a mess for your family. Your assets may have to be placed into a trust or be re-titled in order to avoid the cost, time and hassle of probate. Your plan will vary depending upon your family situation and assets as well as goals and plans for the future. The more your net worth, the more complicated and more important the planning becomes.

Plan for Your Health

Medicaid planning includes many of the same things you need for estate planning. However, the focus is on how to protect and preserve your assets in the event that you need long-term medical care.

Often this planning means trying to qualify for Medicaid benefits, the government program that will pay for long-term care at home or at assisted-living and nursing care facilities. For veterans or the surviving spouses of veterans, help may be available in the way of the special pension known as “Aid and Attendance” to help pay for monthly health care needs. This program has its own complicated rules and requirements to qualify.

You can contact the Veteran’s Administration for the application and there are ways to speed the process, however, you must know the rules. Medicaid planning can also dovetail with estate planning or it can be mutually exclusive. Nursing home costs can run as high as $100,000 per year, so people need to plan early to legally preserve as many assets as possible. This may include spending money on certain protected assets or even giving them away. The planning is not easy, and must follow the letter of the law in order to not conflict with the many regulations that exist.

The longer you wait, the fewer options that exist. So, how do you know which kind of planning you need? And, how do you know what specific planning tools you need among the tools available? You must investigate all the possibilities. During the application process, you need an advocate. Be sure to see a qualified elder law attorney for assistance. He or she will assist you in focusing your estate, Medicaid or veteran’s benefits plan based on your own personal needs and wants. One size definitely does not fit all with these issues.

Laurie Steiner is a certified elder law attorney and accredited attorney for the preparation, presentation and prosecution of claims for veterans’ benefits before the Department of Veterans Affairs (VA). She works at Budish, Solomon, Steiner & Peck, Ltd. in Beachwood. Visit  

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