LAWYERS CAN BE JAILED FOR GIVING ELDERLY LEGAL ADVICE

Question: I recently went to an elder law attorney with my mother and father -- both up in years and suffering from early dementia -- to plan for their anticipated long-term care; however, I was surprised to learn that the lawyer would not advise us about these matters. He told us that there was a new law that could land him in jail if he advised me and my parents about how to qualify for Medicaid. First of all, who in their right mind would pass a law to keep lawyers from advising their clients, and secondly, if lawyers won't - or can't -- give out this information, who can?

Answer: On August 21, 1996, President Clinton signed into law a provision that made it a crime for people to dispose of assets in order to become Medicaid-eligible under certain circumstances. Despite a 98-0 vote in the Senate, almost every member of Congress disavowed knowledge of how the "Granny Goes To Jail Law" was "secretly slipped" into the legislation in the dead of night, at the 11th hour, by unauthorized Congressional staffers. Despite pleading ignorance (which is not difficult to believe), some members of Congress vowed to right the wrong by repealing this law which adversely affected the elderly and the frail.

And so they did. Effective August 5, 1997, Congress ditched the "Granny Goes To Jail" law and passed the "Granny's Lawyer Goes to Jail Law" which makes it a federal crime for lawyers to advise clients to gift away assets in order to become Medicaid eligible for nursing home costs -- even though it is once again legal for the client to do so. Yep, you heard right: Even though it's legal for an elderly person to give away assets in order to qualify for Medicaid, it's a crime for lawyers to advise them that it's legal. In other words, lawyers must choose between being guilty of malpractice for not telling a client what can be done legally and committing a crime for giving this advice. Lawyers who violate the law can be sentenced to one year in jail and be fined $10,000. And it's not just the elder law attorneys who are at risk. It's also those who practice in the tax and estate planning areas.

Even though there are other ways in which to qualify clients for Medicaid without making gifts, those ways may not be what is in the client's best interests.

Once again, Congress and the President have not only removed critical funding for the elderly and disabled, but also have taken away the planning tools from frail, middle-income seniors -- most of whom face the risk of financial devastation of long-term health care -- and have subjected those who advise middle-income seniors to criminal responsibility for engaging in long-term care planning, all without providing responsible alternatives.

Once again, Congress has placed no similar restrictions against estate planners who help the wealthy use gifting and trusts in order to reduce estate taxes or against advisors who, through tax planning, help the wealthy and corporate America to reduce their income tax liabilities.

Despite the fact that the new law is a gross violation of the First Amendment, our elected officials in Washington are still picking on the frail and disabled who can't defend themselves in order to save money so they can spend it elsewhere. If you are concerned about long-term care for yourself or your elderly relatives -- and you should be, we recommend that you again write or call your Representative and Senator, let them know how you feel, and ask them why they did this and what, if anything, they're going to do about it. If you get answers, please let us know.