Serious liabilities may lurk for long-term care facilities and employees affiliated with nonlawyer Medicaid planners.

When a non-lawyer Medicaid planner’s actions result in the nursing home resident’s personal financial harm and/or denial of Medicaid eligibility, this can become a matter of financial exploitation of the resident.

Depending on the case, the facility in which the resident is staying and/or employee who referred the nonlawyer Medicaid planner may be held accountable. There may be a case for negligence under the doctrine of negligent referral, a breach in duty of reasonable care or causation of financial exploitation.

Don’t let this happen! Here are common scenarios:

  1. If the nursing home or employee refers a resident to a nonlawyer Medicaid planner, that nonlawyer has “loyalties” to the nursing home as well as to the nursing home resident. That is a conflict of interest: who will the nonlawyer Medicaid planner take care of?
  2. If the nursing home resident pays money to the nonlawyer in exchange for Medicaid planning services, the nonlawyer Medicaid planner has a business relationship with the resident. If the nursing home or employee that refers the nonlawyer Medicaid planner to the nursing home resident gets a referral fee or kickback, there could be civil or criminal liability. See Chapters 12 and 13 for more about kickbacks, fees and solicitations.
  3. Suppose no one gets caught? A nonlawyer Medicaid planner may get huge commissions or payouts while causing expensive problems for the senior resident and the nursing home, not to mention the compromised families and community.
  • Has the nonlawyer Medicaid “advisor” charged the senior resident a large sum of money for wrong legal advice, invalid trusts or other flawed transfer or spend down of assets?
  • Has the nonlawyer made a small fortune by selling the senior resident an annuity he or she does not even need? The senior has no guarantee that the financial product he or she purchased with personal savings was even necessary or appropriate for Medicaid planning.
  • Did the nonlawyer’s incorrect legal advice result in disastrous and unexpected tax consequences for the senior?



Excerpt From: John R. Frazier, Leonard E. Mondschein. “Protecting Nursing Homes and Their Residents from the Unlicensed Practice of Law.” iBooks.