Medicaid planning is a strategy-focused area of elder law and financial planning that helps clients structure their assets and income so they may qualify for Medicaid benefits, particularly for long-term care in a nursing home or assisted living facility. Because Medicaid imposes strict asset and income limits, planning may involve repositioning assets, spending down in permissible ways, using exempt resources, or leveraging tools such as irrevocable trusts, annuities, or spousal refusal strategies. Advisors must consider federal rules and state-specific regulations, including look-back periods that penalize certain transfers made within a set number of years before application. Life insurance can play a role when policies are surrendered, reduced, or transferred to meet eligibility thresholds, or when cash value needs to be spent or sheltered appropriately. Effective Medicaid planning balances the goal of preserving family wealth with compliance, ethical standards, and the client's desire to receive quality care without exhausting all available assets.

In real-world practice, Medicaid planning usually begins when an aging client or their adult children discover that private-pay long-term care costs may quickly erode savings. Elder law attorneys, financial planners, and insurance professionals often collaborate to review the client's balance sheet, income sources, and existing coverage such as long-term care insurance or life insurance with living benefits. They may explore strategies like converting non-exempt assets into exempt ones, establishing Medicaid qualifying annuities, or transferring assets to an irrevocable trust well in advance of the look-back period. Life insurance policies with cash value may be surrendered, reduced to minimal face amounts, or used to fund burial expense arrangements depending on state rules. Advisors must be careful not to provide legal advice where it is not permitted, instead working closely with qualified attorneys. Clear documentation, suitability review, and family communication are essential, because Medicaid planning often involves emotionally charged decisions about inheritance, caregiving, and end-of-life preferences.