Beware of Illegal Medicaid Plans!
In 2002, Colorado Attorney General Ken Salazar alleged that an attorney, Robert Mason, together with his two sales assistants, peddled an illegal "Family Asset Protection Plan" that misrepresented to consumers
that such Plan would qualify consumers for Medicaid eligibility or for nursing home reimbursement costs;
that a revocable living trust under their Plan would shield a consumer's assets and enable consumers to qualify for Medicaid;
that avoiding probate by purchasing their Plan can save consumers a large percentage of their assets;
Apparently, this flawed "Plan" was promoted through numerous estate planning seminars held throughout the state. They targeted older consumers through direct mail and newspaper advertisements, and invited them to a "free seminar" on estate planning. The defendants charged consumers between $1,500 and $3,000 for the estate plans they knew were defective.
The lawsuit claimed that Mason and his crew engaged in the sale of "Family Asset Protection Plans" ("Estate Plans") which they falsely represented would shelter consumer's assets, therefore qualifying them for Medicaid payment of nursing home care expenses.
The lawsuit alleged the defendants represented that they could qualify consumers for Medicaid even if their income and assets exceeded the statutory limits for Medicaid eligibility. A "revocable living trust" was a primary feature of the plan touted by defendants.
Unfortunately, consumers who subsequently incurred nursing home costs were surprised to learn later that they were not qualified for Medicaid. Consumers also discovered that they had to pay for their nursing home care with their own funds or with long term care insurance, despite the assurances of the defendants that their Plan would qualify them for Medicaid.
At the conclusion of the 2004 trial, the judge awarded damages totaling more than $3 million to 334 victims, most of whom were elderly.
Unfortunately, such a case paints all of us Medicaid/estate planning attorneys in a bad light. The truth is, there are many legitimate techniques available to save families thousands of dollars and qualify for Medicaid sooner. And yes, sometimes that planning can indeed cost $2,000-$5,000 for the lawyer's time and document drafting expertise. However, there is certainly no "cookie cutter" plan available that an attorney can take off the shelf and put all his or her clients into, that would work its magic on them, instantly qualifying them all for Medicaid!
As for the attorney's promotion of the revocable living trust as a Medicaid planning device, see my earlier blog on this very topic. The bottom line is that a living trust can indeed have great utility for estate planning and probate avoidance, but it usually offers no benefits---and can even cause major problems---in a Medicaid planning context.
So a word to the wise: Beware the high-pressure seminars where "salesman" or "assistants" are lined up at the back of the room, selling one-size-fits-all solutions. Estate planning, and especially Medicaid planning, is an extremely complex area, requiring the application of the laws to your unique family situation, and a one-on-one meeting with an experienced elder law attorney. Don't look for a shortcut----especially one that costs thousands of dollars!
Related Tags: nursing homes, medicaid, long-term care
© 2007 by K. Gabriel Heiser
Attorney K. Gabriel Heiser has devoted his legal practice to Medicaid planning, elder law, and estate planning for the last 23 years.
NOTE: For more information on this topic and other Medicaid planning techniques, see http://www.MedicaidSecrets.com, which describes an exciting new 256-page book written by attorney Heiser, "How to Protect Your Family's Assets from Devastating Nursing Home Costs: Medicaid Secrets." You don't have to go broke to get Medicaid to pay your nursing home bills, you just have to know the rules and planning techniques. For the first time ever, you can learn the inside secrets of high-priced estate planning and elder law attorneys, in attorney Heiser's new book.
Recent articles in this category:
- Facts About Walk In Baths
Walk in baths are different from a regular bath because it has a door that seals. It is designed for - Staying Active In Old Age
Growing older shouldn't mean growing inactive - even in old age it is very important to remain as ac - Emergency Alert Devices For Seniors At Home
Isn't it remarkable to see that today, seniors are healthier, more active, increasingly independent, - Retirement Communities Catered For Seniors With Alzheimers
Retirement planning is an investment and should be done by everyone when they reach a particular sta - Elderly Care Jobs
These days there are many families struggling to cope with raising a family whilst working in demand - Healthy Tips For Senior Citizens
When you get older things you used to enjoy becomes more difficult in many ways. Increasing aches an - Legal Guardianship Entails Great Responsibility
If you are requesting legal guardianship over an individual, you need to understand that being a gua - Happy Retirement Living
Most people think that planning your retirement can be done overnight. Unfortunately, this is far fr - The Retirement Planning Checklist
When it comes to planning your retirement, there really is no definite time when you should start wo - Easy Steps To Choosing A Retirement Community
Planning your retirement years is something that you do not just do overnight. There are several fac
Most viewed articles in this category:
- Medicaid Estate Recovery
You've met with your elder law attorney, you've come up with a plan of action, time has gone by, and - Remembering More - How To Recall Memories
We make memories through our senses (sight, sound, smell, taste, touch) and it's through those same - Medicaid Estate Recovery: Exceptions
It's not enough to qualify for Medicaid unless you also plan for the possibility of "estate recovery - Reverse Mortgages and Medicaid
Many seniors are pitched the benefits of a "reverse mortgage" as a way to "unlock" the equity in the - Medicaid Estate Recovery: What to Do?
Merely qualifying for Medicaid is not enough if upon your death your family will have to pay back th - Nursing Home Survey Issued---2006
The annual MetLife Mature Market survey for 2006 was just issued. Here are some of the key findings: - Elder Abuse: What It Is & How to Prevent It
I'm sure you have heard the tragic story of Brooke Astor, the multimillionaire New York socialite wh - Life Insurance and Medicaid Eligibility
In order to qualify for Medicaid coverage of your nursing home stay, your assets cannot exceed $2,00 - Who Pays for My Home After I'm On Medicaid?
The home is one of the biggest assets you are allowed to own and still qualify for Medicaid coverage - Medicaid Annuities: How Do They Work? (Part 2)
Let's take another look at how you can use Medicaid annuities. Say you're single and in the nursing
