Estate Planning vs. Medicaid Planning

One of my cardinal rules for Medicaid planning is that once undertaken other considerations are irrelevant. For example, it is necessary that all assets be liquidated so that they can be used for planning or as part of the spenddown process. Estate planning then becomes irrelevant.

Often a client will say to me that he or she desires to preserve a certain stock or not to liquidate an IRA since these resources are a value to them. I point out the necessity for liquidating assets so that the date of eligibility can be projected and Medicaid planning be undertaken.

Another type of estate planning vs. Medicaid planning issue relates to the size of the individual’s estate. As pointed out in a prior blog, “doing nothing” may be a solution to Medicaid planning. That is, if an individual has sufficient assets (including pension and social security), nursing home costs may be insignificant. In such case, the individual’s will and estate planning become the focus of the attorney’s undertaking. The average stay in a nursing home is slightly more than two years; therefore, a prudent approach to an individual with substantial assets would lean toward estate planning rather than Medicaid planning.


Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© August 2009, Post 103