This glossary defines the most common terms used in estate planning, elder care, Medicare, Medicaid, and veterans benefits. Terms are organized alphabetically for easy reference.
This glossary is for general informational purposes only and does not constitute legal advice. Laws vary by state. Consult a licensed attorney for guidance specific to your situation.
A
Activities of Daily Living (ADLs) Basic self-care tasks used to measure a person’s functional ability. The six standard ADLs are bathing, dressing, eating, toileting, transferring (moving from bed to chair), and continence. Inability to perform ADLs is used to determine eligibility for long term care insurance benefits and other programs.
Advance Directive An umbrella term for legal documents that describe a person’s wishes regarding medical treatment and name a healthcare decision maker. Includes living wills and healthcare powers of attorney. Also called a healthcare directive.
Agent The person named in a power of attorney to act on behalf of the principal. Also called an attorney-in-fact.
Aid and Attendance An enhanced benefit available through the VA pension program for eligible veterans and surviving spouses who need help with daily activities. Provides a higher monthly payment than the basic VA pension.
Alzheimer’s Disease The most common form of dementia. A progressive brain disorder that gradually destroys memory, thinking skills, and the ability to carry out daily activities.
Annuity A financial product that pays out a fixed stream of income over time. Certain annuities can be used as part of Medicaid planning strategies.
Area Agency on Aging (AAA) A local organization funded by the federal government to help older adults, people with disabilities, and their caregivers access services and support. Every community in the United States is served by an Area Agency on Aging.
Asset Any item of value owned by a person including real estate, bank accounts, investments, vehicles, and personal property.
Attorney-in-Fact See Agent.
B
Beneficiary A person or organization designated to receive assets from a will, trust, life insurance policy, retirement account, or other financial account.
Benefit Period The way Medicare measures a patient’s use of hospital and skilled nursing facility services. A benefit period begins when a patient is admitted to a hospital or skilled nursing facility and ends after 60 consecutive days without inpatient care.
Board and Care Home A residential facility that provides housing and personal care services to a small number of residents. Also called a residential care home or adult foster care home.
Buy-In See Entrance Fee.
C
Caregiver Burnout A state of physical, emotional, and mental exhaustion that can occur when a person provides ongoing care for a loved one without adequate rest, support, or self-care.
CARF Commission on Accreditation of Rehabilitation Facilities. An organization that accredits continuing care retirement communities and other care providers against quality standards.
Certified Elder Law Attorney (CELA) A designation awarded by the National Elder Law Foundation to attorneys who have demonstrated expertise in elder law through experience, education, and a comprehensive examination.
Character of Discharge The official characterization of a military service member’s separation from the armed forces. Discharge status — such as honorable, general, or other than honorable — determines eligibility for VA benefits.
Coinsurance The percentage of covered healthcare costs a patient pays after meeting their deductible. For example Medicare Part B requires 20 percent coinsurance after the annual deductible is met.
Community Spouse The spouse who remains at home when the other spouse enters a nursing home and applies for Medicaid. Federal law includes special protections to prevent the community spouse from being left without resources.
Community Spouse Resource Allowance (CSRA) The amount of assets a community spouse is allowed to keep when the other spouse applies for Medicaid nursing home benefits.
Conservatorship A court-supervised arrangement in which a conservator is appointed to manage the financial affairs of an incapacitated person. Similar to guardianship but typically focused on financial matters.
Continuing Care Retirement Community (CCRC) A senior living community that offers multiple levels of care on a single campus — typically independent living, assisted living, and skilled nursing care. Also called a life plan community.
Copay A fixed amount a patient pays for a covered healthcare service such as a doctor visit or prescription drug.
Countable Assets Assets that are included in Medicaid’s financial eligibility calculations. Countable assets must be spent down to the Medicaid limit before benefits begin.
Crummey Powers A legal mechanism used in irrevocable life insurance trusts that gives beneficiaries a limited right to withdraw gifts to the trust, qualifying those gifts for the annual gift tax exclusion.
D
DD-214 The Certificate of Release or Discharge from Active Duty. The official military discharge document required for most VA benefit applications.
Deductible The amount a patient must pay out of pocket before insurance coverage begins for the year.
Dementia A general term for a decline in cognitive function — including memory, thinking, problem solving, and language — severe enough to interfere with daily life. Alzheimer’s disease is the most common form.
Dependency and Indemnity Compensation (DIC) A tax-free monthly VA benefit paid to eligible surviving spouses, children, and parents of veterans who died from a service-connected condition.
Discharge Review Board (DRB) A military board that can review and upgrade a veteran’s discharge characterization within 15 years of separation.
DNR Order Do Not Resuscitate order. A medical order that instructs healthcare providers not to perform CPR if a patient’s heart stops or they stop breathing.
Dual Eligible A person who qualifies for both Medicare and Medicaid. Medicare typically pays first and Medicaid covers remaining costs.
Durable Power of Attorney A power of attorney that remains in effect even if the principal becomes incapacitated. The most commonly used type for long term estate planning.
E
Elder Law A specialized area of legal practice focusing on the legal needs of older adults and their families including estate planning, Medicaid planning, guardianship, and elder abuse.
Eldercare Locator A free nationwide service funded by the U.S. Administration on Aging that connects older adults and caregivers with local resources. Call 1-800-677-1116 or visit eldercare.acl.gov.
Entrance Fee A large upfront payment required by most continuing care retirement communities when a resident moves in. Also called a buy-in.
Escheat The legal process by which an estate passes to the state government when no living relatives of a deceased person can be found.
Estate All of the property, assets, and liabilities owned by a person at the time of their death.
Estate Planning The process of creating legal and financial plans that determine what happens to a person’s assets, healthcare decisions, and dependents when they die or become incapacitated.
Estate Recovery The process by which a state seeks reimbursement from a deceased Medicaid recipient’s estate for the cost of benefits paid during their lifetime.
Estate Tax A tax imposed on the transfer of a deceased person’s estate to heirs. The federal estate tax exemption is over $13 million per individual as of 2024.
Executor The person named in a will to manage the estate after the testator’s death. Responsible for paying debts, filing taxes, and distributing assets to beneficiaries.
Exempt Assets Assets that are not counted toward Medicaid’s financial eligibility calculations. Common exempt assets include the primary residence, one vehicle, and personal belongings.
F
Fiduciary A person or organization with a legal obligation to act in another person’s best interests. Executors, trustees, and agents under power of attorney all have fiduciary duties.
Fiduciary Duty The legal and ethical obligation to act in another person’s best interests, avoid conflicts of interest, and manage assets prudently.
First Party Trust A special needs trust funded with assets belonging to the person with a disability. Subject to Medicaid payback upon the beneficiary’s death.
Formulary A list of prescription drugs covered by a Medicare Part D or Medicare Advantage plan. Drugs are organized into tiers with different cost sharing levels.
Funding the Trust The process of transferring assets into a trust. An unfunded trust provides no benefit — assets must be formally transferred to be protected.
G
Grantor The person who creates and funds a trust. Also called a settlor or trustor.
Grantor Trust A trust in which the grantor is treated as the owner for income tax purposes. Income is reported on the grantor’s personal tax return.
Guardian A person appointed by a court to make personal and medical decisions for an incapacitated adult or a minor child.
Guardianship A court-supervised arrangement in which a guardian is appointed to make personal and medical decisions for an incapacitated person.
Guardian Ad Litem An independent person appointed by a court to investigate and report on the appropriateness of a guardianship or conservatorship proceeding.
H
HCBS Waiver Home and Community Based Services waiver. A Medicaid program that funds services provided in home and community settings as an alternative to nursing home care.
Healthcare Agent The person named in a healthcare power of attorney to make medical decisions on behalf of the principal when they are unable to do so. Also called a healthcare proxy.
Healthcare Directive See Advance Directive.
Healthcare Power of Attorney A legal document that names a person to make medical decisions on behalf of the principal when they are unable to communicate or make decisions for themselves.
HIPAA Health Insurance Portability and Accountability Act. Federal law that protects the privacy of medical records. A HIPAA authorization form allows named individuals to access a patient’s health information.
Home Health Aide A trained caregiver who provides personal care and basic health-related services in the home under the supervision of a nurse or therapist.
Hospice Care Specialized end-of-life care focused on comfort, dignity, and quality of life for people with a terminal illness and a life expectancy of six months or less.
Housebound Benefit An enhanced VA pension benefit available to veterans who are substantially confined to their home due to permanent disability.
I
Incidents of Ownership Rights in a life insurance policy — such as the right to change beneficiaries or borrow against the policy — that cause the death benefit to be included in the insured’s taxable estate.
Intestate Dying without a valid will. When a person dies intestate their assets are distributed according to state intestacy laws.
Intestacy Laws State laws that determine how a deceased person’s assets are distributed when they die without a valid will.
Irrevocable Life Insurance Trust (ILIT) An irrevocable trust designed to hold a life insurance policy outside the insured’s taxable estate.
Irrevocable Trust A trust that generally cannot be changed, amended, or canceled once it is created and funded. Used for asset protection, Medicaid planning, and estate tax reduction.
J
Joint and Survivor Annuity A pension payment option that provides continued payments to a surviving spouse after the retiree’s death.
Joinder Agreement The document a person signs to join a pooled trust and establish their individual sub-account within the trust.
L
Lady Bird Deed An enhanced life estate deed available in some states that allows the property owner to retain full control of the property — including the right to sell or mortgage without the beneficiary’s consent — while still avoiding probate at death.
Life Estate A form of property ownership in which a person — called the life tenant — has the right to use and occupy property for their lifetime. When the life tenant dies ownership passes automatically to the remaindermen.
Life Tenant The person who holds a life estate interest in property and has the right to use it during their lifetime.
Living Trust A trust created during the grantor’s lifetime that can be used to manage assets and avoid probate. See also Revocable Living Trust.
Living Will A legal document that describes a person’s wishes regarding specific medical treatments such as CPR, mechanical ventilation, and artificial nutrition when they are unable to communicate.
Long Term Care Insurance Insurance designed to cover the cost of extended personal care services including nursing home care, assisted living, memory care, and in-home care.
Long Term Care Ombudsman An advocate for the rights and wellbeing of residents of nursing homes and other long term care facilities. Every state has a Long Term Care Ombudsman Program funded under the Older Americans Act.
Look-Back Period The period during which Medicaid reviews financial transactions when evaluating long term care eligibility. Currently 60 months (5 years) for nursing home Medicaid. The VA pension program has a 36-month look-back period.
M
Medicaid A joint federal and state program that provides health coverage and long term care benefits to eligible low income individuals. The primary payer for nursing home care in the United States.
Medicaid Asset Protection Trust (MAPT) An irrevocable trust specifically designed to protect assets from Medicaid’s spend-down requirements while allowing the grantor to potentially qualify for Medicaid long term care benefits.
Medicaid Planning The legal process of organizing finances and assets to qualify for Medicaid benefits while preserving as much wealth as possible.
Medicare The federal health insurance program for people aged 65 and older and certain younger people with disabilities. Divided into Parts A, B, C, and D.
Medicare Advantage (Part C) A private insurance alternative to original Medicare that must cover at least the same benefits as Parts A and B. Often includes extra benefits such as dental, vision, and hearing.
Medicare Savings Program A state program that helps low income Medicare beneficiaries pay for Medicare premiums, deductibles, copays, and coinsurance.
Memory Care Specialized care for people with Alzheimer’s disease or other forms of dementia. Provides a secure environment with staff trained in dementia care.
Medigap Private health insurance that supplements original Medicare by covering out-of-pocket costs such as deductibles, coinsurance, and copays. Also called Medicare Supplement Insurance.
Miller Trust A type of trust used in some states to help people with income above the Medicaid limit qualify for nursing home benefits. Also called a Qualified Income Trust or QIT.
N
National Family Caregiver Support Program A federally funded program administered through local Area Agencies on Aging that provides information, counseling, respite care, and other support to family caregivers.
Nursing Home See Skilled Nursing Facility.
O
Older Americans Act Federal legislation enacted in 1965 that established the national Aging Network and funds programs and services for older Americans including nutrition services, caregiver support, and elder abuse prevention.
P
PACE Program of All-Inclusive Care for the Elderly. A Medicare and Medicaid program providing comprehensive medical and social services to frail older adults as an alternative to nursing home care.
Palliative Care Medical care focused on relieving symptoms and improving quality of life at any stage of a serious illness. Unlike hospice care palliative care can be provided alongside curative treatment.
Patient Pay Amount The portion of a nursing home resident’s income that must be applied toward the cost of care when receiving Medicaid benefits.
Payable on Death (POD) A beneficiary designation on a bank account that allows funds to pass directly to a named beneficiary without going through probate.
Penalty Period A period of Medicaid ineligibility resulting from disqualifying asset transfers during the look-back period.
Per Stirpes A method of distributing assets in which a deceased beneficiary’s share passes to their descendants.
POLST Physician Orders for Life-Sustaining Treatment. A medical order form that documents a seriously ill person’s wishes regarding CPR, mechanical ventilation, and other life-sustaining treatments. Known by different names in different states including MOLST and MOST.
Pooled Trust A type of special needs trust established and managed by a nonprofit organization with individual sub-accounts for each beneficiary.
Pour-Over Will A will that works alongside a living trust to direct any assets not transferred into the trust during the grantor’s lifetime into the trust upon death.
Power of Attorney A legal document that gives one person (the agent) the authority to act on behalf of another person (the principal) in financial, legal, or medical matters.
Primary Insurance Amount The monthly Social Security benefit a worker is entitled to receive at full retirement age.
Principal The person who grants authority through a power of attorney.
Probate The court-supervised process of validating a will and overseeing the distribution of a deceased person’s estate.
Q
Qualified Income Trust (QIT) See Miller Trust.
Qualified Personal Residence Trust (QPRT) An irrevocable trust that allows a grantor to transfer their home at a reduced gift tax value while retaining the right to live in the home for a specified period.
R
Remainderman The person or persons who receive full ownership of property when a life tenant dies.
Respite Care Temporary relief provided to family caregivers by another caregiver — allowing the primary caregiver to rest, travel, or attend to their own needs.
Revocable Living Trust A trust created during the grantor’s lifetime that can be changed or canceled at any time. Commonly used to avoid probate and plan for incapacity.
Revocable Can be changed, amended, or canceled at any time by the grantor during their lifetime.
S
Service-Connected Disability An injury or illness that occurred or was aggravated during active military service. VA disability compensation is paid for service-connected disabilities.
Skilled Nursing Facility (SNF) A licensed residential care facility that provides around-the-clock medical supervision and personal care assistance. Also called a nursing home.
Special Needs Trust A trust designed to hold assets for a person with a disability without disqualifying them from government benefits such as Medicaid and SSI.
Spend Down The process of reducing countable assets to meet Medicaid’s financial eligibility requirements.
Spendthrift Trust A trust that includes provisions protecting a beneficiary’s inheritance from their own creditors and poor financial decisions.
Spousal Impoverishment Protections Federal rules designed to prevent the community spouse from being left without adequate resources when the other spouse enters a nursing home and applies for Medicaid.
Step-Up in Basis An increase in the tax basis of inherited assets to their fair market value at the time of the original owner’s death. Can significantly reduce capital gains taxes when beneficiaries sell inherited property.
Successor Trustee The person or organization named to take over as trustee when the original trustee is unable or unwilling to continue serving.
Sundowning A pattern of increased confusion, agitation, and behavioral changes in the late afternoon and evening hours in some people with dementia.
Supplemental Security Income (SSI) A federal benefit program providing monthly payments to low income individuals who are aged 65 or older, blind, or disabled. Eligibility is based on financial need — not work history.
Survivor Benefits Payments made to family members of a deceased worker through Social Security, pension plans, veterans benefits, or life insurance.
T
Testamentary Trust A trust created by a will that takes effect only after the testator’s death.
Testator The person who creates a will.
Third Party Trust A special needs trust funded by a parent, grandparent, or other third party — not assets belonging to the person with a disability. Not subject to Medicaid payback.
Transfer on Death (TOD) A beneficiary designation on an investment account that allows assets to pass directly to a named beneficiary without going through probate. In some states also available for real estate.
Transfer on Death Deed A deed that allows a property owner to name beneficiaries who will automatically receive the property at the owner’s death without going through probate. Available in about half of U.S. states.
Trustee The person or organization legally responsible for managing trust assets for the benefit of the beneficiaries.
U
Uniform Transfers to Minors Act (UTMA) A law that allows property to be held and managed by a custodian for a minor until they reach a specified age — typically 18 to 25 depending on the state.
V
VA Pension A needs-based tax-free monthly benefit paid to eligible wartime veterans with limited income and a non-service-connected disability. Enhanced levels include the Housebound benefit and Aid and Attendance.
Veterans Service Organization (VSO) A nonprofit organization that provides free assistance to veterans with VA benefit claims, appeals, and other services.
W
Ward The person whose affairs are being managed under a guardianship or conservatorship. Also called a protected person.
Wartime Veteran A veteran who served at least one day of active duty during a qualifying wartime period as defined by law.
Will A legal document — also called a last will and testament — that describes how a person wants their assets distributed after death, names an executor to manage the estate, and can name a guardian for minor children.
For more detailed explanations of any term on this list visit our articles section at SeniorFactsGuide.com. This glossary is for general informational purposes only and does not constitute legal advice. Laws vary by state. Consult a licensed attorney for guidance specific to your situation.