If you’re thinking about estate planning, good for you! Your goal is to make…
Five Reasons Why the Answer is Yes
If you, or your parent or loved one, needs long-term care, and the cost of the care is starting to get scary, you realize you need help. Going to a “Medicaid Consultant” can sound tempting. They tell you they can help you for much less money than you would pay an attorney.
The old adage, “Don’t be penny-wise and pound-foolish” means, don’t try to save a few pennies now when that could cost you far more later. This definitely applies with long-term care planning. Here are the reasons why you should use an Eldercare or Elder Law Attorney (the terms are interchangeable), and when it would be appropriate to go to a “Medicaid Consultant.”
1. A “Medicaid Consultant” is not licensed or accredited
Most “Medicaid Consultants” are social workers looking for new or additional sources of income. They are not required by any Board or Agency, governmental or otherwise, to master specific knowledge about anything that pertains to Medicaid planning. They may know something about Medicaid, but the only professional accreditation organization for any position such as theirs has failed to gain any traction.
You will have no idea whether their advice is correct, and no recourse to any professional oversight organization. Do you want to take the chance that your situation will involve some aspect of Elder Law that they know nothing about? They may not even know what they don’t know.
Elder Law attorneys, on the other hand, undergo a rigorous education and examination procedure before they are permitted to practice law. They are required to take Continuing Legal Education courses to maintain their law license. In New York, most Elder Law attorneys are members of the New York State Bar Association Elder Law and Special Needs Section. These attorneys attend one or more meetings every year to stay up to date on changes in the law, and to improve their knowledge in this complex practice area. They may also belong to professional organizations such as the National Association of Elder Law Attorneys (“NAELA”).
2. A comprehensive Long-Term Care plan involves far more than just Medicaid
Designing and implementing an effective plan requires knowledge of some, and frequently all, of these legal practice areas:
- Laws and rules regarding government benefits, including Medicare and Medicaid
- Wills and Trusts
- Probate and Administration
- Real estate
- Powers of Attorney
A Medicaid Consultant is not equipped or permitted to advise you on any of these issues – and without such advice, your plan may be inappropriate or incomplete. An Elder Law attorney is qualified to review and advise you on all the moving parts of an effective and successful plan.
Here are just a few examples of the issues that a typical Elder Law client may face: Is your house “exempt” from Medicaid’s reach, or is it, or will it be, subject to a lien or claim? Can you protect your house, and, if so, what is the best way to do that? Does it matter whether your child has been living with you? Does it matter if assets such as bank accounts are titled as Joint Tenants or Tenants in Common, or “In Trust For” another person? What are the tax implications of transferring money or property to your children or other family members, as opposed to transferring money or property to a trust? A Medicaid consultant cannot (and should not) advise you about such issues.
3. Only attorneys are permitted to give legal advice
Under New York law, “No corporation or voluntary association shall . . . hold itself out to the public as being entitled to practice law, or to render legal services or advice . . . .”
That is called “unauthorized practice of law,” and it applies to individuals as well as corporations.
Some Medicaid Consultants provide advice such as: “You should transfer ownership of your house into a trust.” How can such advice be viewed as something other than legal advice? And yet, if the consultant does not provide such advice. they could be leaving out a crucial component of an effective estate plan and long-term care plan. Another Medicaid Consultant site actually states that they can set up a trust – although a trust is by its very nature a legal document.
The website of one Medicaid Consultant states, “[We provide] the finest Medicaid planning for eligibility and protection of assets and income.” This advertisement overtly suggests they will give you advice on how to protect your assets and income. Again, this plainly suggests that they are going into the realm of unauthorized practice of law.
4. Bad advice can be disastrous
Unauthorized practice of law is illegal for a reason: If you take a chance with the quality of advice you receive, it could literally cost you your home or your life savings.
We’ve seen social workers and nurses give people advice that is totally wrong. “You’ll never get Medicaid until you’ve spent down all your money” or “You have too much income to qualify for Medicaid” are common erroneous statements. Consultants and health care professionals don’t mean to steer you wrong – they are just ill-equipped to provide legal advice. Some Medicaid Consultants who sell Medicaid-compliant annuities have an inherent conflict of interest. They earn commissions on selling these products, which may or may not be in the client’s overall best interest.
You may pay an Elder Law attorney more up front – but they will give you the advice that is best and most cost-effective for your particular situation. They can also make sure that your plan is fully and properly implemented.
5. A Medicaid Consultant can’t help you with important planning steps
A Medicaid Consultant cannot and should not:
- Give you advice on what is the best plan for you
- Create an Asset Protection Trust
- Advise you regarding the transfer of financial assets
- Advise and assist you with the transfer of real property
- Create or provide you with a comprehensive Power of Attorney (“POA”) that will permit your agent to take all necessary legal steps in the process
Under What Circumstances Would You Go To a Medicaid Consultant?
A Medicaid Consultant can help you gather the documents you need to support your Medicaid application, and help you fill out the Medicaid application form. That’s it.
If you get halfway through the process with a Medicaid Consultant, and you or they decide that a Medicaid Asset Protection Trust is the way to go, they may refer you to an Elder Law attorney for further discussions. But the Elder Law attorney may have to start the planning process at the beginning – meaning more time and effort for you, and probably more money out of your pocket overall.
If you have very little money, a Medicaid Consultant may be all you need. But if you consult with an Elder Law attorney, the attorney should tell you that.
Peace of Mind is Priceless
Life is complicated. There are a lot of moving parts in most people’s lives. Don’t shortchange your future by choosing a “consultant” who is very limited in the scope of what they are permitted to do, and out of their depth (not to mention outside the law) when they venture into areas where they lack the knowledge and skill to provide the services that are needed.
We have seen countless clients come in to our firm anxious and distressed, who later left our offices reassured and happy. They were able to see the entire picture, and were relieved to have been given a road map that would ensure their, or their loved one’s, health and peace of mind.