Most states, including New York, regulate the unauthorized practice of law (“UPL”). These rules are intended to protect the public from receiving or acting on incorrect legal advice that can lead to adverse or even disastrous consequences.

At the same time, some people believe that UPL statutes unfairly protect lawyers and their profitable franchise. Many of them think that sources such as Legal Zoom or Suze Orman provide valid, low cost, alternatives to seeing a lawyer and paying high legal fees.

The tension between these points of view is plainly visible in the Elder Law field, where uninformed social workers, unsupervised paralegals, and others in the health care arena, sometimes advise clients on Medicaid planning and preparing Medicaid applications. In some instances, nursing homes and home care agencies prefer to deal with non-lawyers, because they believe that attorneys can be insensitive to their financial interests.

While it might be argued that our view is colored by self-interest, we believe that clients are poorly served and risk financial disaster when non-lawyers provide services that are not within their area of expertise. Here are several examples:

The daughters of their elderly mother who was about to enter a nursing home sought our advice about protecting mom’s substantial assets (over $1 million). Mom’s social worker had proposed to handle her Medicaid planning, and had given the daughters a written proposal. The social worker’s plan was for mom to transfer $550,000 to the daughters, which would incur a Medicaid penalty of about 4 years of ineligibility. Then, according to the social worker, mom would use the rest of her money to pay the nursing home during the 4-year penalty period, at the end of which mom would become eligible for Medicaid, thereby saving $550,000.

The daughters were aware of Medicaid’s 5-year “look back,” so they knew it would be impossible to save all of mom’s money. The social worker’s plan, which appeared to save $550,000, sounded great to them. However, they were cautious enough that they wanted confirmation from an attorney that the plan would work.

Unfortunately, the plan was a total disaster. If it had been implemented, the family probably would have lost the entire amount of mom’s savings. Why? The problem here is that the social worker assumed that Medicaid’s “penalty period” started when mom transferred the $550,000 to the daughters. However, the penalty period arising from transfers of assets commences only when the Medicaid applicant is in the nursing home, has applied for Medicaid, and is eligible for benefits “but for” the transfer of assets. Here, mom would have retained assets far in excess of the Medicaid eligibility level (well below 30,000, even after a large increase scheduled for 2023) for several years. Her 4-year penalty would have started only after she spent down all her other assets. The result, under the social worker’s plan, would have rendered mom ineligible for Medicaid for 8 or 9 years, and would have caused her to lose all of her money.

The correct solution for this family would be to transfer all of mom’s assets now, to the daughters or to a trust that would be managed by the daughters. Then in 5 years, this transfer would be beyond Medicaid’s “look back” and the remaining assets would be preserved. Of course, during this 5-year period, mom would have to private pay at the nursing home, but the total cost would not exhaust her savings. This family would likely save several hundred thousand dollars.  (The amount or percentage saved in each case depends on the actual cost of the particular nursing home, and the applicant’s income from Social Security, pensions, retirement plans, or other sources.)

Another example concerned a family that wanted to implement a Medicaid plan to save their father’s assets. Dad was suffering from Alzheimer’s Disease, and he no longer had sufficient mental capacity to execute legal documents.  The family believed that they could act on dad’s behalf to implement a plan, because they had a durable power of attorney.

The problem in this case was that the power of attorney was useless. The family had downloaded a form on the Internet from the website of a prominent financial adviser. Unfortunately, the form was invalid under New York law, and, even if it had been valid, the powers granted to the agents were inadequate to allow them to perform the acts that would have been necessary to protect dad’s assets (e.g., the power to make gifts or transfers of assets).

Unfortunately, because dad now lacks mental capacity, there was no opportunity to re-do the power of attorney. The result was that the family had no option other than to seek a guardianship for dad. This involves court proceedings, substantial legal costs, and often lengthy delays. Further, the Court’s decisions will not necessarily be in line with the family’s wishes. At best, the Medicaid plan that might have been put into effect immediately must now be delayed for months, causing the family to incur significant long-term care costs while they wait for the Court’s permission to proceed.

In the above cases, and in many others, the decision not to obtain competent legal advice — in order to save money on legal fees —  in fact, produced dramatic losses. While legal fees may sometimes appear to be high, it is usually because there is a lot of legal work to be done, or complex issues to be resolved. Without a lawyer’s time, expertise, and judgment as part of the decision making process and the preparation of the legal documents involved, nobody should be surprised that the results will be less than optimal, and possibly disastrous. 

At Lamson & Cutner, we want our legal fees to be cost-effective for all of our clients, and we don’t propose legal solutions when the fees involved would be out of proportion to the anticipated benefits. In addition, we advise our clients in advance of the fees and costs involved, before any work is started, so that clients can decide for themselves whether going forward makes sense for them.  Every case has unique aspects, and there is no “one size fits all” solution for legal matters.

We also want to respect the rights and legitimate interests of nursing homes and home care agencies. We understand that they need to be paid for their services in a timely way. We believe that our undivided loyalty to our clients means that we should assist them in meeting, not evading, their legal obligations. When advising on Medicaid planning, we are very clear with clients regarding when and how much Medicaid is required to pay, and when and how much they are required to private pay. When private payment is due, we follow up with clients regarding their obligations.  In addition, our ability to prepare and process Medicaid applications in an efficient, accurate, and timely way is a great benefit to our clients — but nursing homes and other providers also benefit from the fact that it is extremely unlikely that a Medicaid application prepared by Lamson & Cutner would be denied or unduly delayed.

We believe that geriatric care managers, social workers, and others share our passion to protect the rights of the elderly and disabled.  However, we ask them to think twice about giving legal advice to clients, which advice should be provided by Elder Law attorneys who have the knowledge, experience, and legal judgment to obtain the best outcomes for clients.

The New York State Education Department instituted a requirement that, “[b]eginning January 1, 2015, each Licensed Master Social Worker (LMSW) and Licensed Clinical Social Worker (LCSW) must complete 36 hours of approved continuing education courses for each triennial registration period.”

Social workers are now required to gain CE credits in order to maintain their licenses. While various courses for CE credit were being offered, Lamson & Cutner saw a significant gap. Where could social workers gain knowledge about the legal and financial issues that so directly and deeply affect their patients, as well as their patients’ families and loved ones?  Learning about these issues is crucial for social workers who advise and assist the elderly and disabled.

Lamson & Cutner decided to answer the call, and became the first law firm in New York State to become an accredited provider of courses for CE credit to LMSW’s and LCSW’s.  Our firm has always had a strong focus on educating social workers and others about important Elder Law issues and strategies.  It was a natural fit for the firm to seek, and gain, approval to grant CE credit for courses similar to the seminars the firm has given regularly over the years.

For social workers who have clients or patients who need long-term care, knowing about Elder Law strategies can enable them to guide those clients. Elder Law strategies can mean the difference between living out their lives in comfort, on their own terms, or quickly becoming impoverished and ending up prematurely confined to a nursing home.

Lamson & Cutner is now offering courses of highly relevant and useful content on Elder Law and Estate Planning topics. Each course provides CE Credit of 2.0 contact hours to LMSWs and LCSWs.

Examples of CE Courses we offer:

Medicare and Medicaid in NY, and the Current Status of Changes to Community Medicaid Services

How your clients or patients can obtain the best health care and long-term care, and how they can protect their assets and income against the ruinous costs of health care and long-term care.

Disability Planning, Estate Planning, and Advance Directives

Protecting the disabled, including minor and adult children; cost-effective estate planning, including provisions for elderly or disabled family members; advance directives – powers of attorney, health care proxies and living wills.

If you are a LMSW or LCSW who works with the elderly or disabled, or their families, you’ll find that you can be much more helpful to your patients and clients when you have the knowledge gained from a Lamson & Cutner course for CE credit.  Click here to check on dates and locations of upcoming sessions.

An open letter from David Cutner

Lamson & Cutner provides the highest level of professional and ethical representation for its clients, using means and methods that actually benefit third party providers as well.   Here is how:

Contents

There is a tension, some would say a conflict, that exists today between Elder Law attorneys and many of the institutions that serve their clients.  Understandably, nursing homes and hospitals want to be paid for their services, and want to maximize their revenues.   Some nursing homes and hospitals believe that Elder Law attorneys help clients conceal their assets, and frustrate collection efforts when private payment is due for medical services or long-term care.

Attorneys owe a duty of undivided loyalty to their clients.   Helping clients to achieve their goals and the most advantageous results in legal and proper ways is what attorneys are supposed to do.   At Lamson & Cutner, we believe that our role as attorneys includes advising clients about their obligations and how best to satisfy them.   However, we don’t believe in cutting corners, and we don’t help clients to evade their obligations.

Private Pay vs. Medicaid Pay

Many clients come to Lamson & Cutner to seek our advice about planning and paying for long-term care.   Virtually all of these clients are looking to protect their assets or income, and hoping to become eligible for Medicaid without spending down their life’s savings or losing their homes.   Many of them have spouses or disabled children for whom they need to provide, and they are doubly concerned that home care or nursing home costs will exhaust their savings.

When institutional care may be needed, now or later, of course we advise every client about Medicaid’s “look back” and “penalty” provisions if they are thinking about transferring assets to family members or to a trust.  In many cases, we will be able to shorten the penalty period, and thereby protect a certain percentage of the client’s assets, typically by structuring a private annuity contract (many other law firms use promissory notes for the same purpose, but we believe that a private annuity is better and safer).

In most cases, there will be a period of time (sometimes as long as five years) during which the client will be required to private pay for institutional care.   Here is where the client’s best interests and the nursing home’s interests come together if Lamson & Cutner is involved.

The client’s concern is obviously with protecting assets and getting on Medicaid soon as possible.   The nursing home prefers private pay, but recognizes that it must accept Medicaid patients.

The critical issues for the nursing home are:  (1) making sure that there is a financially responsible party to private pay for any charges that are not covered by Medicaid; (2) making sure that the client’s eligibility date for Medicaid is correct;

(3) avoiding long delays in obtaining Medicaid approval while services are being provided on a “Medicaid pending” basis; and (4) collecting the client’s NAMI (net available monthly income).

A financially responsible party to private pay

Lamson & Cutner is exacting with clients about their obligations for private payment to nursing homes or hospitals.   We provide detailed and accurate information about how much is due and when.   If transferred funds are going to be used by family members to private pay, we insist that these funds be held in a trust, or in a segregated account, to be used solely for the patient’s expenses while he or she is alive.

Nursing homes and hospitals benefit from the fact that Lamson & Cutner never ignores their clients’ obligations to private pay for care, and we do everything we can to assure that clients satisfy their obligations.

An accurate pick up date

For a firm engaged in Elder Law practice, the ability to determine an accurate Medicaid pick up date is essential.   Anything less is unacceptable.  The client wants and needs to know, because his or her obligation to private pay ceases on that date.   At the same time, we are well aware that giving an inaccurate pick up date can cause serious consequences for a nursing home.  If the date is wrong, the nursing home may suffer losses in connection with the room and board, and other services, that it provided with the expectation of payment from Medicaid.

We like to think that a nursing home can “take to the bank” a pick up date that it receives from Lamson & Cutner.   We take great pride in having an unblemished track record in this regard.

Medicaid pending

Undoubtedly, one of the most difficult problems in running a nursing home is waiting for payment in Medicaid pending cases.  While the home is waiting for payment in arrears, it is providing costly services to the patient.  Any delay in obtaining approval from Medicaid will have an adverse impact on the nursing home’s cash flow.

It is perhaps too easy for Elder Law attorneys to say that this is not their problem.  After all, so the argument goes, Medicaid makes the decisions, and any delays are attributable to its caseworkers and its bureaucracy.

At Lamson & Cutner, we do not look for easy excuses.   We believe that an accurate and well-presented application facilitates Medicaid approval, and, again, we take great pride in our unblemished track record in gaining Medicaid approval of applications that we have prepared.

Our means and methods of preparing Medicaid applications have been frequently praised by caseworkers and supervisors as exemplary and of uniquely high quality.   In fact, from time to time, Medicaid sends its personnel to our training seminars.  We take this as a great compliment.

We believe that the best prepared Medicaid applications gain the easiest and fastest acceptance and approval.  We don’t have any hard data to back up this belief, but, as Damon Runyon once famously said: “The race is not always to the swift nor the battle to the strong, but that’s the way to bet.”   We’ll “bet” every time on our applications against any others.

The NAMI

We know that collection of a patient’s NAMI can be a sore point for a nursing home.   The patient’s income legally belongs to the nursing home, but sometimes this money is used by the patient or a family member for other purposes, and the nursing home’s cash flow is adversely affected.

At Lamson & Cutner, we view payment of the NAMI to the nursing home as a serious obligation on the part of the client.  We calculate the amount due very carefully, and we insist that it be paid.  We follow up with clients to make sure that they are satisfying this obligation.

We believe that this is a sound practice.   All of our clients benefit from the good relations that we maintain with nursing homes.  We want our clients to be advantaged by our excellent advice and services, but we don’t want them to take unfair advantage of nursing homes by evading their lawful obligations.

Refer to an Elder Law attorney or a non-lawyer?

There seems to be a growing cottage industry of geriatric care managers, social workers, independent paralegals, and others who have gone into the business of preparing Medicaid applications and advising clients on Medicaid planning.  We understand that some nursing homes actually prefer to deal with these non-lawyers, rather than having an Elder Law attorney involved.  Their reasoning seems to be that Elder Law attorneys will help clients to conceal assets, or to evade their obligations to the nursing home.   (As discussed above, that is certainly not what we do at Lamson & Cutner.)

In our view, it is imprudent and shortsighted for nursing homes or other institutions to refer cases to non-lawyers for Medicaid planning, or to permit their own employees to provide this kind of advice.  When something goes wrong, the nursing home is going to be blamed or seen in a poor light for not giving proper guidance to the client.  This is not good public relations.   Moreover, in some circumstances, the nursing home could be subject to civil liability or even criminal penalties for unauthorized practice of law.  See, New York Judiciary Law, Section 476.

Clients are poorly served when non-lawyers provide services that are not within their area of competence or expertise.  Here is one recent example, among many others, that I have personally observed:

An elderly woman was in the rehabilitation unit at a well-regarded New York City nursing home.  She was soon to be transferred to a long-term care unit.  This woman’s social worker proposed to handle her Medicaid planning, and had given the daughters a written presentation as to how mom’s substantial assets (over $1 million) could be protected.  The social worker’s plan was for mom to transfer $550,000 to the daughters, which would incur a Medicaid penalty of about 4 years of ineligibility.  Then, according to the social worker, mom would use the rest of her money to pay the nursing home during the 4-year penalty period, at the end of which mom would become eligible for Medicaid, thereby saving $550,000.

The daughters were aware of Medicaid’s 5-year “look back,” so they knew it would be impossible to save all of mom’s money.  The social worker’s plan, which appeared to save $550,000, sounded great to them.  However, they were cautious enough that they wanted confirmation from an attorney that the plan would work.

The social worker’s plan was a total disaster.  If it had been implemented, the family probably would have lost the entire amount of mom’s savings.   Why?   The problem here is that the social worker assumed that Medicaid’s penalty period started when mom transferred the $550,000 to the daughters.   However, the rule she apparently relied on was changed in February 2006.   Since then, the penalty period arising from transfers of assets commences only when the Medicaid applicant is in the nursing home, has applied for Medicaid, and is eligible for benefits “but for” the transfer of assets.   Here, mom would have retained financial resources far in excess of the Medicaid eligibility level for several years.  Her 4-year penalty would have started only after she spent down all her other assets.  The result, under the social worker’s plan, would have rendered mom ineligible for Medicaid for about 8 years, and would have caused her to lose all of her money.

Imagine the potential liability and public relations disaster for the nursing home that would have existed if the social worker’s plan had been implemented.   Fortunately, in this case, the daughters had the good sense to check with Lamson & Cutner before proceeding.   However, other clients of the nursing home, faced with a similar proposal, might not have done so.

The correct solution for this family was to transfer all of mom’s assets immediately.   About half would be a direct transfer to the daughters or to a trust that would be managed by the daughters, and the rest would be used to buy a private annuity from the daughters.  The private annuity contract would be prepared by their Elder Law attorney.    During the penalty period that resulted from the direct transfer, mom would have to private pay at the nursing home, but the payment would come from the monthly proceeds of the private annuity and whatever other income she had (pension or Social Security, for example).     Once the penalty period had passed, the direct transfer portion of the assets would be preserved.   This family would likely save several hundred thousand dollars.  (The amount or percentage saved in each case depends on the actual cost of the particular nursing home, and the applicant’s income from Social Security, pensions, retirement plans, or other sources.)

This case is just one example of what can happen when an Elder Law attorney’s time, expertise, and judgment is subtracted from the decision making process and from the preparation of the legal papers involved.   Nobody should be surprised that the results will be less than optimal, and in some cases disastrous.

We value communication with you

If you are the owner or administrator, director of admissions, Medicaid coordinator, director of social work, or discharge planner, of a nursing home or hospital, we would like to know you, and we would like you to know us.

We would be happy to visit with you at your facility, to discuss issues of common concern, and to see if we can find solutions that are mutually beneficial.  If you have problems with any of the advice, tactics, or strategies offered by Elder Law attorneys to their clients, we would like to hear about it.  Also, we would happy to tell you about the offerings for health care professionals at our Elder Law Training Center.

Lamson & Cutner does not have any institutional clients, and we do not seek to represent institutions.   Our practice is, and will continue to be, the representation of the elderly and disabled, and their families.   As a result, we can give totally objective advice to every client without fear or favor from any other source.

About Lamson & Cutner, P.C.

Lamson & Cutner, P.C., is a dedicated Elder Law firm.  This is our sole practice area, and we have deep experience in Medicaid planning, the preparation of Medicaid applications, long-term care insurance, Wills and Trusts, powers of attorney, health care proxies, estate administration, guardianship, taxation of personal income and estates, and residential real estate transactions.

Lamson & Cutner believes strongly in educating health care professionals and the general public about issues relating to health care and long-term care.   At our Elder Law Training Center, we give frequent seminars for health care professionals in our office and at their facilities.  We also present at law firms, accounting firms, financial institutions, and at senior centers.  Our speakers are frequently complimented on their ability to explain complex legal subjects to non-lawyers in a clear and easily understandable way.  The firm also publishes a monthly electronic newsletter, The Elder Law Exchange, an Elder Law News blog, and numerous articles and booklets in print.

Lamson & Cutner has an extremely competent and knowledgeable professional staff of attorneys and paralegals.  We work as a team, and documents that leave the office are subject to a rigorous review process.   For more information about Lamson & Cutner and its personnel, please see our website, www.lamson-cutner.com.

We look forward to hearing from you.

Sincerely,

David A. Cutner

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Prior results obtained by the firm do not guarantee a similar outcome in future cases.