NonLawyer Medicaid Planning Deemed the Unlicensed Practice of Law by Florida Supreme Court

Medicaid Planning UPL Advisory Opinion Is Approved

April 10, 2015 – It’s final: The Florida Supreme Court has ruled that it is the Unlicensed Practice of Law (UPL) for Medicaid planners who are not lawyers to engage in Medicaid planning activities.

Except for licensed attorneys, nonlawyer Medicaid planners who advise Florida Medicaid applicants on how to structure their income and assets in order to become eligible for Medicaid benefits are practicing law without a license.

UPL is a third degree felony in Florida, punishable by up to five years in prison.

The need for this advisory opinion arose from the rapid spread across Florida of non-attorney Medicaid planners. Some of these non-attorneys market themselves as “experts” and “specialists” to seniors and their families, for the purpose of making seniors financially qualified for nursing home Medicaid.

There is no state or federal agency to license and regulate Medicaid planners. So while someone might hold a professional license to sell annuities or practice financial planning, that license does not authorize the person to practice Medicaid planning legal activities.

Who does this Advisory Opinion protect?

Medicaid planning involves some of the most vulnerable groups of individuals in Florida: elderly individuals, and individuals with severe mental and/or physical disabilities.

Great harm can be caused to seniors, those who are disabled, and their families and caregivers, by individuals who practice law without the proper training, licensure and accountability.

Please take a moment to learn how the Unlicensed Practice of Law as it relates to Medicaid planning affects our elders, and how it has evolved into a delicate yet vital mission for Elder Law lawyers to advocate for and protect Florida’s seniors and the disabled from dire financial and emotional harm.

What Medicaid planning activities are UPL when practiced by a non-lawyer?

The Advisory Opinion states clearly the rules whereby a non-lawyer crosses the line into the practice of law. A non-attorney individual may not:

Draft personal service contracts – complex documents that help you qualify for Medicaid benefits by reducing your reportable assets;
Determine the need for, prepare, and execute a Qualified Income Trust – an irrevocable trust created with the applicant’s income in order to meet Medicaid eligibility requirements;
Sell personal service contracts or Qualified Income Trust forms or kits in the area of Medicaid planning;
Render legal advice regarding the implementation of Florida law to obtain Medicaid benefits. This includes advising an individual on the appropriate legal strategies available for spending down and restructuring assets and the need for a personal service contract or Qualified Income Trust.

What Medicaid planning activities can a non-Lawyer legally do?

A non-lawyer may assist a Medicaid applicant with the preparation of the actual Medicaid application, as it is authorized by federal law.

In addition, Department of Children and Families (DCF) employees who are non-lawyers may legally assist Medicaid applicants with the application process as well as inform Medicaid applicants about Medicaid planning tools and eligibility laws.

What is the potential for harm to the public?

Non-lawyer Medicaid planners expose Florida residents to various dangers, including

the denial of Medicaid eligibility
exploitation of vulnerable, unsuspecting Florida citizens
leaving seniors and their families or caregivers open to charges of Medicaid fraud
severe or ruinous tax debts and obligations
purchasing the wrong or erroneous financial products, endangering the person’s life savings

Who are non-attorney Medicaid planners?

Individuals and companies with no license to practice law, yet stake their claim as Florida “Medicaid planners” run the gamut.

Individuals as Medicaid Planners

Documented reports of non-lawyers who engaged in Medicaid planning activities include:

annuity salesmen
insurance salesmen
geriatric care managers
Florida licensed nurses
former nursing home employees
former DCF employees
a disbarred attorney
an individual who has been permanently barred from the securities industry by the Financial Industry Regulatory Authority (FINRA)
an insurance agent who lost his insurance license due to two felony convictions
Florida licensed insurance agents who have been permanently barred from the securities industry by the State of Florida.

Medicaid Planning Companies

The advisory opinion also targets Medicaid planning companies that allege to have relationships with lawyers who draft the legal documents for the company’s clients.

When lawyers themselves affiliate or collaborate with non-attorney Medicaid planners, many ethical and legal issues arise. Attorneys run the risk of crossing the line of the rules of professional ethics.

The Florida Supreme Court now holds that such companies would be engaged in UPL activity unless:

the client establishes an independent attorney-client relationship with the attorney;
payment from the client is directly to the attorney, and
the initial determination that the particular legal document or Medicaid planning strategy is appropriate for the client given the client’s particular factual circumstances is the determination of the attorney.

As of 2014, there was an estimate that there may be up to 600 non-lawyers and various “Medicaid Planning” companies throughout Florida.

Referring Sources – has someone advised you to retain a non-lawyer Medicaid planner?

In my years of experience as an Elder Law attorney, I have seen cases where those in need of Medicaid assistance were referred by various trusted sources—e.g., social workers, nursing home administrators, hospital discharge planners—to non-lawyer Medicaid planners.

Both referral sources and seniors who retain a non-attorney for Medicaid planning purposes should be aware of the possible issues associated with their actions, however unwitting or mindful their actions may be.

According to Florida Statute 777.011,

“Whoever commits any criminal offense … or aids, abets, counsels, hires, or otherwise procures such offense to be committed … is a principal in the first degree and may be charged, convicted, and punished as such…”

Therefore, it is critical that everyone—those who work closely with Florida’s seniors and those in need of Medicaid planning assistance—know how to protect themselves from the risks of exposure to liability.

Protecting Your Own Legal Rights

Avoid drafting or executing any legal document or contract for seniors or family members;
Do not advise the senior or family members about what legal forms to get or how to fill them out.
Refer the senior to the Florida Bar, to seek out an elder law attorney who is able to protect the senior’s rights and counsel the senior and family about the full range of long-term care issues, Medicaid planning legal options that will protect his or her assets, all possible consequences, and costs relevant to the client’s circumstances.

What about Florida DCF employees? Can they legally help me with Medicaid Planning?

Yes. As a state agency of Florida, the DCF can legally help you. DCF non-attorney staff have an affirmative duty to assist Medicaid applicants and tell them about planning tools and options. Therefore,

DCF staff may assist in the application process
DCF may tell Medicaid applicants about Medicaid trusts and other eligibility laws and policies governing the structuring of income and assets when relevant to the applicant’s facts and financial situation.

Read the Advisory Opinion!

You can read the complete advisory opinion here: Advisory Opinion No. SC14-211: The Florida Bar Re: Advisory Opinion – Medicaid Planning Activities by NonLawyers.

It has taken nearly five years to achieve this critical opinion, from the initial discussion about the advisory opinion, to the final Court action in April:

Chaired by attorney John R. Frazier, the UPL Subcommittee of the Florida Bar’s Elder Law Section petitioned the Florida Bar’s Standing Committee on UPL with the need for this advisory opinion.
The advisory opinion was submitted to the court by the Florida Bar’s Standing Committee on the Unlicensed Practice of Law Committee.
The advisory opinion was issued by the Florida Supreme Court in January 15, 2015.
The advisory opinion became final on April 10, 2015.

William D. Burns V. Florida Bar
(U.S.S. Ct. 15-75)

On October 5, 2015, the United States Supreme Court denied the petition for Certiorari of William D. Burns, challenging the Florida Supreme Court Medicaid Planning Advisory Opinion. When the United States Supreme Court denies a petition for Certiorari, this means that the U.S. Supreme Court did not consider the petition on the merits of the case. Rather, this means that the court decided not to consider the case, and will let the decision of the Florida Supreme Court stand. Accordingly, the challenge by William D. Burns to the Advisory Opinion was not successful, and the Florida Supreme Court Advisory stands, as approved by the Florida Supreme Court.