Florida Supreme Court Advises on “Medicaid Planning” by Nonlawyers as “Unlicensed Practice of Law’
Following extensive hearings and related proceedings, including revision of an earlier proposed advisory opinion by the Florida Bar’s Standing Committee, the Florida Supreme Court issued a per curiam opinion on January 15, 2015, addressing certain Medicaid planning activities, concluding that when performed by nonlawyers, they constitute the “unlicensed practice of law” (UPL), thereby leading to potential sanctions.
The ruling focuses on actions by nonlawyers who assist with one or more of the following activities leading up to an application for Medicaid: (1) drafting of personal service contracts, (2) preparation and execution of Qualified Income Trusts; or (3) rendering legal advice on implementation of Florida law to obtain Medicaid benefits. The Court expressly distinguished the “preparation of the application for Medicaid benefits” as being outside of its opinion, pointing to federal law as authorizing nonlawyer assistance in the application process.
The Elder Law Section of the Florida Bar was the petitioner seeking the advisory ruling.
In the detailed conclusion, the “harm and potential harm” from “unregulated” nonlawyers selling trust packages was outlined:
“[T]he testimony [during hearings] revealed that nonlawyer Medicaid planners are essentially unregulated, as there are no licensing, education or advertising requirements. Because of this lack of regulation, nonlawyer Medicaid planners include a disbarred Florida lawyer, an individual who lost his securities license for fraudulent practice, and a life insurance agent who was convicted of two felonies and lost his insurance license.
Testimony described the type of harm caused by nonlawyer Medicaid planners which includes denial of Medicaid eligibility, exploitation, catastrophic or severe tax liability, and the purchase of inappropriate financial products threatening or destroying clients’ life savings. The potential for public harm is even greater when the nonlawyers put themselves in a position of reliance and advising the customer as to the proper course of action to take. In order to protect the public from harm, it is the opinion of the Standing Committee that the activities described herein constitute the unlicensed practice of law and should not be authorized.”
Based on this evidence, the Supreme Court adopted the opinion of the Standing Committee as its own opinion, concluding that:
- It constitutes the unlicensed practice of law for a nonlawyer to draft a personal service contract and to determine the need for, prepare and execute a Qualified Income Trust.
- A nonlawyer should not be authorized to sell personal service or Qualified Income Trust forms or kits in the area of Medicaid planning.
- It constitutes the unlicensed practice of law for a nonlawyer to render legal advice regarding implementation of Florida law to obtain Medicaid benefits, including advising an individual on the appropriate legal strategies available for spending down and restructuring assets.
The ruling, which expands on a 1992 Florida Advisory Opinion finding that assembly, drafting, execution and funding of “Living Trusts” by nonlawyers is subject to UPL restrictions, expressly permits employees of the Florida Department of Children and Families to continue to assist the public in completion of Medicaid applications.
For the full opinion, see The Florida Bar re: Advisory Opinion-Medicaid Planning Activities by Nonlawyers, No. SC14-211, Florida Supreme Court, January 15, 2015.