Key Definitions in Elder Law Explained

Navigating elder law can feel overwhelming, especially when every conversation seems packed with unfamiliar legal terms. Whether you’re helping an aging parent, planning for your own future, or trying to understand your rights, knowing the language of elder law is the first step toward making informed decisions.

Older couple learning about elder law and what it involves

At Sowerby & Moustakis Law, we guide families across New Hampshire through estate planning, long-term care options, and guardianship matters. This article breaks down some of the most important elder law definitions you’ll encounter so you can move forward with confidence.

Foundational Elder Law Terms to Know

Understanding the basics of elder law starts with getting familiar with key terms that come up frequently in legal documents, consultations, and court proceedings. Here are the ones you’re most likely to encounter:

  • Power of Attorney (POA): A Power of Attorney is a legal document that gives someone else the authority to act on your behalf. The person granting the authority is the principal, and the person receiving it is the agent or attorney-in-fact.

There are different types of POA. A Durable Power of Attorney remains in effect even if the principal becomes incapacitated, making it a critical tool in elder law. A Medical or Health Care Power of Attorney (sometimes called a health care proxy) gives your agent the ability to make medical decisions if you’re unable to communicate your wishes.

Paperwork associated with elder law understanding the forms
  • Guardianship: Guardianship is a court-ordered relationship where one person (the guardian) is appointed to make personal decisions for another (the ward), often due to incapacity or disability. These decisions might include where the person lives, what care they receive, and how they manage day-to-day activities.
  • Advance Directive: An advance directive combines a living will and a medical power of attorney. It lets you document your wishes about medical care ahead of time and designate someone to speak on your behalf if you’re unable to. This ensures your preferences are known, especially regarding life-sustaining treatments like resuscitation or feeding tubes.
  • Long-Term Care: Long-term care refers to a range of services designed to meet health or personal care needs over an extended period. It can include in-home care, assisted living, or nursing home facilities. Because these services are costly, planning for long-term care—especially how to pay for it—is a major component of elder law.

Financial and Medicaid-Related Elder Law Terms to Know

A big part of elder law deals with planning for long-term care without depleting your life savings. That’s where understanding financial terms and Medicaid planning tools becomes essential.

  • Medicaid vs. Medicare: These two programs are often confused. Medicare is a federal health insurance program primarily for people over 65. It covers short-term hospital stays, rehab, and limited skilled nursing care, but it doesn’t pay for long-term custodial care.
Older woman and health aid understanding medicare and medicaid

Medicaid‌ is a needs-based program jointly funded by federal and state governments. It does cover long-term care in nursing homes or at home, but eligibility is based on income and asset limits. 

  • Medicaid Spend-Down: To qualify for Medicaid, many individuals must reduce their countable assets below the program’s limits. This process is called a spend-down. It’s important to understand which expenses are allowable and how to avoid triggering a penalty period. Improperly gifting assets or selling property below market value can delay eligibility.
  • Look-Back Period: Medicaid has a five-year look-back period in New Hampshire. When you apply, the state reviews your financial records for the previous five years to see if you transferred any assets for less than fair market value. If so, a penalty period may apply during which Medicaid will not cover your care.
  • Irrevocable Trust: An irrevocable trust is often used in Medicaid planning. Once created, the grantor gives up control over the assets placed in the trust, which may help shield them from being counted as available for Medicaid purposes. However, timing is everything—placing assets into a trust within the five-year look-back period can still result in penalties.
  • Life Estate: A life estate allows a person to remain in their home for the rest of their life while transferring future ownership to someone else. This arrangement can help preserve the home from being sold to pay for care while ensuring that it ultimately passes to a chosen beneficiary. Like trusts, life estates must be carefully structured and timed to avoid Medicaid issues.

Plan Ahead with Confidence

Understanding elder law terms is the first step in protecting your future and the people you love. At Sowerby & Moustakis Law, we work with New Hampshire families every day to develop practical, legally sound plans that bring peace of mind. Whether you’re concerned about long-term care costs, planning ahead for incapacity, or managing the affairs of a loved one, we’re here to help.

Contact us right now to schedule a consultation and start planning with clarity.

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