Question: I am 60, my wife is 58, and our children are grown. My wife’s parents are deceased; both of my parents (mid-80's) are living, but have done no planning. Although we are all in good health, we recently began talking to my folks about the need to plan for their and our future health and long-term care. When should the planning process begin, and what should be done?

Answer: Assuming you agree that the planning process should begin while you have the greatest number of options available, then 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 age 62 or older; 3) you live in one of the 29 states that makes 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; or 8) you have a family history of Alzheimer's Disease, stroke, or other chronic illness.

What should you do? First, you must understand that the only ways to pay for long-term care are 1) from your own income and assets, 2) long-term care insurance, or 3) Medicaid after you have become impoverished. Second, don’t believe that common myth that Medicare pays for long-term care. If you are over age 65, Medicare will only pay for nursing home care in limited circumstances for a limited period of time. Third, be aware that if you remarry and have a premarital agreement providing that you are not responsible for your spouse's obligations, this agreement will not bind third persons, meaning that if your spouse enters a nursing home, your assets can be tapped for this care.

How to get started? You and your family members should seek the advice of a qualified attorney in your state who can explain to you the rules in your state. If you have a taxable estate, you should seek estate planning. At a minimum, all family members should sign appropriate durable powers of attorney, durable health care powers of attorney, and wills that are designed for your specific circumstances. We always suggest that you look into long-term care insurance as a way to either fully or partially fund long-term care as we have found that folks who have purchased quality policies have less problems and expense than those who don’t.

What should you avoid? We recommend against using preprinted forms, kits, computer programs, or lawyers who provide the same form power of attorney to all clients. These important documents must be prepared to fit your specific situation.

Question: My mother, now age 85, was in a nursing home for nearly four years as a private pay patient before my father could get her qualified for Medicaid by "spending down" to the $75,000 maximum in our state, his house, some old furniture, and a car. During the course of her illness, my dad spent in excess of $250,000. Not wanting the rest of his property to go to the nursing home if he died, my father went to a lawyer who prepared a will which excluded my mother from his estate and left everything to me and my sister. When our father died this past summer, we took his will to the probate court, sold the house, and began distributing the money when we received a letter that Mom’s Medicaid was being terminated because she was entitled to one-third of our my father’s $270,000 estate, and did not make a claim for her share. Although our lawyer says this is a technicality, he says he can fight the decision. But I have lost confidence in him and believe he does not know what he is talking about. I don't understand how this system works. Can you explain what happened here and is there anything we can do?

Answer: Even though your father thought he was "cutting your mother out," as a married individual, your mother has a statutory right to elect against the will and take one-third of your father's estate. In the eyes of the Medicaid folks, the decision of your mother -- or her guardian or attorney in fact -- not to file this claim to one-third of your father’s estate is treated as if your mother had received the $90,000 and then gave it away. This is the reason she is being disqualifying him from Medicaid benefits. In other words, if there are assets to which an individual is entitled but does not receive because of action or inaction on his or her part, he or she is deemed to have received the asset and then given it away.

While we agree with your assessment that you should not fight a battle you can't win, it seems to us that 1) your father should have been informed of the probability of this result by the lawyer who prepared his will, and 2) your father should have been advised about how to avoid this most unintended result by using a special needs trust in his will. And if you or one of your siblings has your mother’s power of attorney, you might be able to avoid this disqualification based on the advice of a qualified elder law attorney in your state.