Founder
It is against the law for a non-lawyer to provide certain legal services or to give legal advice for compensation to someone. For instance, only lawyers can represent you in court, draft a trust or will or give advice on matters that touch upon legal issues. With millions of persons born during the baby boom generation–generally assumed as from 1946 to 1964–turning 65 every year, unlicensed lawyers are offering Medicaid planning advice and providing other services to Medicaid applicants that can constitute the unlicensed practice of law. In Massachusetts, Medicaid is also called MassHealth.
Medicaid is a health insurance program for low-income individuals, seniors and persons with disabilities. It is a vital program that can provide long-term nursing care for these people. Without it, millions of people would either not receive care or be forced to use all their assets for long-term care. To be eligible, you must meet certain income criteria. You are permitted to structure your finances to qualify for benefits and to preserve much of your assets while being the recipient. .
Unlicensed Advisers are a Threat
In most areas of the country, paralegals are permitted to provide some services considered to be within the purview or practice of attorneys only. This can include drafting summary marital dissolution documents, drafting a will or contract or preparing documents if specifically permitted under state law. Some states only allow such practices if an attorney is supervising the paralegal or the attorney is the one representing the client and the paralegal is accumulating information or explaining procedures.
Unlicensed attorneys pose a real risk to Medicaid applicants or anyone else seeking legal advice or services. Without a firm knowledge of the law, a so-called adviser may not recognize significant tax consequences or the effect that incorrect advice may have on contractual obligations regarding a person’s unique circumstances. Also, an unlicensed adviser is unlikely to have kept current with changes in the law that can affect eligibility. If the wrong advice is given or documents improperly prepared, a Medicaid applicant may have his or her benefits denied or delayed that can pose risks to a person’s health and adversely affect their financial situation.
The unauthorized practice of law can be either a criminal violation or a civil one. Massachusetts law treats the practice as a misdemeanor offense with up to 6 months in jail for a first offense.
Medicaid Advice
Florida, traditionally the home of millions of retirees, recently issued guidelines as to what constitutes the practice of law regarding Medicare planning that can be a guide for Massachusetts residents as well. For instance, non-lawyers may not:
- Prepare personal service contracts
- Prepare and execute income trusts
- Render any legal advice regarding the implementation of state law to obtain Medicaid benefits
The following are some of the services and instruments a Medicaid lawyer can provide for someone seeking such benefits.
- Personal Service Contracts
These are contractual arrangements between a person needing assistance with daily activities who is eligible for Medicaid and the service provider, usually a relative. Since Medicaid has strict income limitations, the contract can reduce the applicant’s assets by having the provider paid a certain sum by the applicant.
Since the contract affects the legal rights and responsibilities of the parties, only a licensed attorney can draft such contracts and counsel clients on its implications.
- Qualified Income Trusts (QIT)
Trusts are useful estate planning instruments usually designed to bypass probate, creditors and certain taxes. Medicaid applicants who have income that does not qualify them for benefits can use a Qualified Income Trust where assets are owned by the trust so as to qualify the applicant for Medicaid–a perfectly legitimate strategy. Setting up and funding a QIT, however, has certain requirements. If not done properly, it will be invalid and prevent a person from receiving the Medicaid benefits that would otherwise have been available and could result in significant loss of assets for an individual with health problems.
- Advice from Medicaid Lawyer Patricia Bloom-McDonald
Do not assume that anyone with some knowledge of the Medicaid system is qualified to give you the advice and services you need to make you eligible for benefits. No reasonable person would have a medical procedure performed by anyone other than a trained and licensed physician and the same caution applies to legal services. You risk substantial harm if someone without a law license offers you Medicaid planning services.
Contact Medicaid lawyer Patrician Bloom-McDonald who has been practicing elder law, retirement and estate planning for decades. Call her office for advice on MassHealth eligibility criteria and how you or a loved one can qualify for benefits.