Q: My dad was in a nursing home for nearly two years as a private pay patient before my mother could get him qualified for Medicaid by "spending down" -- paying more than $120,000 to the nursing home. Mom was told by her lawyer to change her will, cut out Dad, and leave everything to me and my brother. Well, when Mom unexpectedly died before Dad, we were told by the state that Dad's Medicaid was being terminated because he was entitled to one-third of Mom's $300,000 estate and he did not make a claim for his share. The lawyer never told Mom or us about this. How can this happen?

A: Even though she thought she was "cutting your Dad out," as a married individual, your father has a statutory right to elect against your mother's will and take one-third of her estate. In the eyes of the Medicaid folks, the decision of your father -- or of his attorney-in-fact or guardian -- not to file this claim is treated as if your father had received his share and then gave it away -- thus disqualifying him. If an individual on Medicaid is entitled to assets but does not receive them because of action or inaction on his or her part, he or she is deemed to have received the asset and then gifted it away. In most states, your father would have been entitled to one-third of your mother's estate.

This unintended result could have been avoided had a qualified attorney who understood Medicaid had been consulted.

Q: I am 57 years old, my wife is 54 and our children are grown. Both sets of our parents are in their mid-80s. Although we are all in good health, we recently began reading your column and talking about the need to plan for our future health and long-term care. Just when should the planning process begin, and what should be done?

A: Assuming you subscribe to the concept that planning should begin at a time when the greatest number of options are available, we believe that the health care and long-term care planning process should start as early as possible --- especially if: 1) you are over age 40; 2) you have parents who are 62 or older; 3) you live in one of the 29 states that make children responsible for their parents' medical care; 4) you have a disabled child; 5) you are divorcing; 6) you are divorced and are paying long-term support to a former spouse; 7) you are over age 45 and are remarrying; 8) you are marrying for the second or more time, or 9) you have a history of Alzheimer's disease, stroke or other chronic illness in your family.

What are the basics? First, you must understand that the only ways to pay for long-term care in a nursing home are 1) out of your own pocket, 2) long-term care insurance, or 3) Medicaid after you have become impoverished. (If you are over age 65, Medicare will only pay for nursing-home care in limited circumstances for a limited period of time.) Second, understand that the only payment sources for assisted living are your own money or long-term care insurance. Third, understand that if you remarry and have a premarital agreement providing that you are not responsible for your spouse's obligations, your agreement is not binding on third persons. This means that if your spouse enters a nursing home or requires medical care or other "necessaries," your assets can be tapped for this care. 

What is the best way to begin the process? We believe that the first step is for family members to seek the advice of a qualified elder law attorney in their state of residence who can explain the ins and outs of long-term care. Then, at a minimum, family members should sign appropriate durable powers of attorney, durable health care powers of attorney, and wills designed for specific individual needs and circumstances. We caution our readers not to rely upon forms, kits, books or computer programs for "do-it-yourself" documents when you are dealing with issues this important. And, lastly, we suggest that you look into long-term care insurance as a way to either fully or partially fund long-term care expenses, should the need occur. The younger you are, the less the cost. 

Jan Warner is a member of the National Academy of Elder Law Attorneys and has been practicing law for more than 30 years. Jan Collins is editor of the Business and Economic Review published by the University of South Carolina and a special correspondent for The Economist. You can learn more information about elder care law and write to the authors on www.nextsteps.net.

Copyright 2009, Newspaper Enterprise Assn.