The “Hook” That Is Offered To You By The Nursing Home

Upon the admittance of a loved one to a care facility, a discussion of payment for services will take place.  The nursing home will let you know when your loved one’s money is likely to run out, and when you should apply for Medicaid benefits.  Often, the representative will suggest that you hire a recommended Medicaid planning service, or “Application Assistors” which will help you pull all of the documents and file the application at the local Medicaid office, for you.  The price quoted to you will be about $7,000.00.

Many people agree to contract with these organizations.  They are convenient, you believe you will not have to think about it anymore, and the company will make sure that the application gets in on time.  A big relief?

Robert J. Shanahan, Jr.

Medicaid Planning Companies Are Practicing Law Without a License

In May 2016, the Committee on the Unauthorized Practice of Law, which is appointed by the New Jersey Supreme Court, issued Opinion 53, stating that “Applying the law to an individual’s specific circumstances generally is the ‘practice of law’”.   New Jersey joined the states of Florida, Tennessee and Ohio in determining that these Medicaid planning companies, or “Application Assistors”, commit the unauthorized practice of law when they provide legal advice on strategies to become eligible for Medicaid benefits including advice on spending down resources, tax implications, guardianships, sale or transfer of assets, creation of trust or service contracts and the like. Such activities by these companies are a criminal offense, N.J.S.A. 2C:21-22, and they may also violate the Consumer Fraud Act, N.J. S.A. 56:8-1 et seq.

Medicaid Application Assistors Are Harming The Elderly And Their Families

The Committee reported that non-lawyer advisors had advised a family member that she could receive money as a caregiver when the family member did not qualify for that status; advised a family member to spend down an IRA when it would have been more reasonable to purchase an annuity with the money; advised a family member to draw down her assets when it would have been more sensible to transfer the money to a disabled child; advised a family member to transfer real estate when it would have been prudent to address the significant tax implications of that plan; counseled people on wills and powers of attorney, the need for guardianship and the authority to transfer assets; counseled on the  standards for Medicaid coverage, on nursing home laws, transfers of property, on the impact of marriage and divorce, and similar matters.  Such erroneous and incomplete legal advice causes the applicant, beneficiary and family significant harm.

Medicaid Planning Companies are Owned By Those In The Nursing Home Business

These Application Assistance companies are not a bunch of disinterested parties.  They are owned by the same people who own the major nursing facilities in the State. Of course, it’s in their interest to get you to pay them.  It’s in their interest to control the application process so that the nursing home can start collecting money under Medicaid.  If they control the process, there is little risk of a gap in payments.  The nursing home will also receive the maximum amount of your loved one’s money, because the Medicaid Assistor will not do the type of planning an elder law attorney will do: taking advantage of Medicaid regulations to transfer assets to a spouse, disabled child, create Medicaid annuities, establish trusts, or suggest ways to spend down that are favorable to a spouse who is staying at home.  In fact, many times, you will pay more to these companies than you would have had you gone to an elder law attorney.

Don’t sign up for the nursing home’s choice of Medicaid Planner

Medicaid planning companies are not acting in your loved one’s interest.  It may be easy to just sign the contract along with the other papers given to you by the institution.  But, you will be taking a risky step, and it may be very costly.

Robert J. Shanahan, Jr. Esq. focuses his practice in estate planning, elder law and probate matters. Mr. Shanahan additionally practices in business law and non-profit matters. He is a trained, experienced mediator and offers dispute resolution services, particularly for those arising from probate and elder law matters. Additionally, Mr. Shanahan’s firm, Law Offices of Robert J. Shanahan, Jr., LLC, offers a breadth of additional services to families and businesses throughout central New Jersey.

Mr. Shanahan received his Juris Doctor from the Temple University School of Law in 1985, and obtained licensure in New Jersey in the same year.  He received a Bachelor of Arts degree in History in 1981 from William Paterson University, with honors. Robert is a member and Past President of the Hunterdon County Bar Association, and is a member of the New Jersey State Bar Association, and its Elder Law and Disability Section.  He is also active in the National Academy of Elder Law Attorneys. Robert is a member of the Hunterdon Medical Center’s Bio Ethics Committee and was awarded a Five Star Financial Services Professional Award for 2016.

You may contact Bob at (908) 751-1551, or [email protected].