Medicaid planning with an elder law attorney — when it's worth the cost

This article is for educational purposes only and does not constitute medical, legal, or financial advice. Every family situation is different, and you should consult with appropriate professionals about your specific circumstances.

Understanding Your Parent's Situation

Medicaid planning with an attorney is one of those things that sounds expensive and might actually save money—or it might be completely unnecessary for your family. The challenge is figuring out which category you fall into before you've spent money on a consultation. Medicaid planning isn't about hiding assets or doing anything illegal. It's about understanding your parent's financial situation, their likely healthcare needs, and the rules that govern Medicaid coverage, then making decisions that protect your parent's money while ensuring they qualify for benefits when they need them.

The starting point is honest assessment. What does your parent own? Not just their house, but savings, investments, vehicles, retirement accounts, and any other assets. What do they owe? Debts, mortgages, taxes—anything that's actually a liability. What's their health status right now, and what's likely in the future? You don't have a crystal ball, but you can look at family history and your parent's current conditions to make educated guesses. How much can your family realistically pay for care if it's needed? This is where many families get stuck because the answer is often "not much" or "we're not sure." That's okay. The whole point of Medicaid planning is to figure out how to pay for care when family resources aren't enough.

Understanding your parent's preferences matters enormously. Would they want to stay home with in-home care, or are they open to assisted living or nursing home care? How much do they care about leaving an inheritance, and how much would they prioritize their own care? Some parents would rather spend down their assets completely to stay in their own home than move to a facility and leave money behind. Other parents want to preserve assets for their children no matter what. There's no right answer here, but not having this conversation leads to conflict later when decisions have to be made under pressure.

You also need to understand family dynamics. Is your parent capable of making these decisions right now, or are they starting to have cognitive issues? Are adult children on the same page about what should happen, or is there disagreement? Are there blended families or complicated relationships that might complicate planning? An elder law attorney can help sort through these issues, but it's helpful if you've already thought about them.

Setting Financial Goals

Once you understand your parent's situation, you need to think about what you actually want to accomplish. Are you trying to make your parent eligible for Medicaid at some point? Are you trying to minimize what your parent has to pay for care? Are you trying to protect the house so it doesn't have to be sold to pay for nursing home care? Are you trying to preserve assets for your children? You might have multiple goals, and they might not all be compatible. An attorney can help you see the tradeoffs and decide what matters most.

Let's say your parent has $300,000 in savings and a house worth $400,000. The house has no mortgage. If your parent needs nursing home care that costs $8,000 a month, your parent's savings will be gone in about three years, and then Medicaid will pay for continuing care. At that point, the house might be protected under Medicaid rules (rules vary by state), or it might be subject to something called estate recovery, where the state tries to get money back from your parent's estate after they die. If you want to preserve the house for your children, you might want to put it into a trust or take other steps to protect it. But those steps need to happen before your parent is in crisis.

Or let's say your parent has $50,000 in savings and a house. They're not likely to qualify for Medicaid based on assets alone, but if they need long-term care, those $50,000 will run out quickly. You might want to spend down the assets on care your parent needs anyway, so the money goes to something useful rather than going to Medicaid. Or you might want to gift money to children now while your parent still can, to protect assets before a crisis happens. Again, timing matters.

An important concept in Medicaid planning is something called the "look-back period." When your parent applies for Medicaid, the agency will look back at the past five years of financial transactions. If you transferred significant assets during that time, Medicaid might penalize your parent by delaying their coverage. This is why timing matters and why talking to an attorney before you're in crisis is valuable. You're not trying to hide assets or do anything illegal,you're just trying to do things correctly if you decide to do them at all.

Different care scenarios will cost different amounts. In-home care is usually the least expensive per month but might go on for years. Assisted living is more expensive but might be more sustainable. Nursing home care is the most expensive but might be shorter. Your goal is to figure out what your parent might actually need and what your parent and family might be able to pay for before turning to Medicaid.

Building Your Strategy

This is where an elder law attorney earns their fee. They'll help you understand state-specific Medicaid rules, what your parent can do legally to protect assets, what trusts or other legal structures might make sense for your family, and what documents your parent needs. They'll explain the look-back period in detail, help you understand what counts as a transfer, and show you what the timing considerations are.

An attorney will help you coordinate with other professionals. If your parent has significant assets, a tax professional or financial advisor might need to be involved to understand the tax implications of different moves. If your parent owns a business, the attorney and a business specialist might need to coordinate. If your parent has a complicated estate, an estate attorney might be involved. The elder law attorney's role is often to coordinate all these people and make sure everyone is working toward the same goals.

An attorney will also help you understand your parent's estate documents. Does your parent have a will? A power of attorney? A healthcare power of attorney? A trust? These documents matter for Medicaid planning because Medicaid cares about what your parent owns and controls. If your parent has a revocable living trust, that's different from owning assets in their own name, which is different from owning assets in a trust that's not revocable. An attorney can help you figure out whether your parent's current documents make sense or whether changes are needed.

Your attorney will help you document all planning decisions. This is boring but important. If you make decisions about how to structure your parent's assets or what transfers to make, you want documentation of why you made those decisions, what your parent understood about them, and what you were trying to accomplish. This protects everyone,it protects your parent by showing Medicaid that the decisions were intentional and carefully made, and it protects your family by creating a record of what was decided and why.

Taking Action Now

The biggest mistake families make is waiting too long. You want to talk to an attorney while your parent still has legal capacity to make decisions and execute documents. If your parent has already lost capacity, some planning options are no longer available. You might still be able to work with the attorney, but your options will be more limited and more expensive.

The second biggest mistake is not implementing the plan. Talking to an attorney and getting advice is one thing. Actually doing what the attorney recommends,executing new documents, moving assets, setting up trusts, or making gifts,is different. Implementation takes time and often requires coordination with multiple people. It's easy to delay, especially if everything feels fine right now and you think you have time. But you don't have as much time as you think, and once your parent is in crisis, you can't implement the plan anymore.

Starting with your parent is critical. They need to understand what's being proposed and why. They need to be on board with the decisions, or at least accept them. If your parent doesn't understand the plan or doesn't agree with it, implementation will be painful. A good attorney will talk directly to your parent, explain things clearly, and make sure your parent understands and agrees before doing anything.

Your attorney will help you prepare documents. This might be a new will, a new power of attorney, a trust, or other documents depending on your situation. These documents need to be prepared correctly and executed properly or they won't be valid. That's why you need a lawyer for this,not because the concepts are complicated, but because the details matter and mistakes are expensive.

You'll also need to handle practical issues like retitling assets if that's part of your plan. If you're moving property into a trust, for example, that requires paperwork with the county or with financial institutions. Your attorney will guide you through this, but it takes time and attention.

Finally, you need to communicate with your family. If you're making decisions that affect what your children might inherit, they deserve to know what's being done and why. If siblings need to be involved in decisions about your parent's care and finances, they need to understand the plan. This conversation isn't always easy, but it's better to have it while there's time to sort out disagreements than to have it in the emergency room.

An elder law attorney's fee will depend on how complicated your situation is. A simple consultation and document update might cost $500 to $1,500. A more complex situation with multiple strategies and multiple documents might cost $2,000 to $5,000 or more. You're paying for expertise about a system that most people don't understand, and you're paying for time and knowledge that can save your parent and family tens of thousands of dollars. If you're in a situation where Medicaid might eventually be needed, talking to an attorney is usually worth the cost. If your parent has minimal assets and would easily qualify for Medicaid if needed, an attorney might not be necessary.

How To Help Your Elders is an educational resource. We do not provide medical, legal, or financial advice. The information in this article is general in nature and may not apply to your specific situation. If you are concerned about a loved one's long-term care planning or Medicaid eligibility, consult with an elder law attorney or contact your local Area Agency on Aging for guidance and support.