Written by Tracy Zanco, Esq.

In a ruling issued January 15, 2015, Florida’s Supreme Court determined that certain Medicaid planning activities performed by non-lawyers constitute the unlicensed practice of law.

This ruling will help eliminate such Medicaid planners from the marketplace where their actions are unregulated and have resulted in harm to Medicaid applicants including the denial of benefits, negative tax consequences, loss of assets, and exploitation.

Medicaid planning entails assessing facts relevant to a client’s health, finances, and family, and applying those facts to federal and state laws governing Medicaid.  A plan is then developed to structure or spend a client’s assets and income in compliance with the law, and includes drafting legal documents to execute the plan, and providing assistance to the client to carry out the plan.  For years, non-lawyers offered Medicaid planning services, but, since they were an unregulated group, their plans often failed to comply with the law and resulted in harm to their clients.

The Court issued an opinion after a request from the Florida Bar.   After taking testimony from attorneys who practice in the area of elder law, the Court determined it needed to issue an opinion in order to protect the public from harm.

Specifically, the Florida Supreme Court determined that the following activities by non-lawyers constitute the unlicensed practice of law:

• Drafting a personal service contract
• Determining the need for, preparing, and/or executing a Qualified Income Trust
• Selling personal service contract or Qualified Income Trust forms or kits in the area of Medicaid planning
• Rendering legal advice regarding the implementation of Florida law to obtain Medicaid benefits, including advising on legal strategies available for spending down and restructuring assets and the need for a personal service contract or Qualified Income Trust

The opinion clarifies that a non-lawyer’s preparation of the Medicaid application itself would not constitute the unlicensed practice of law because it is authorized by federal law.  Further, Florida Department of Children and Families staff may tell Medicaid applicants about Medicaid trusts and other eligibility laws and policies governing the structuring of income and assets.  Lastly, for companies that purport to associate themselves with attorneys, the Court determined that their practices would also constitute the unlicensed practice of law unless the client formed an independent attorney-client relationship with the attorney, paid the attorney directly, and the attorney determined the legal strategy.

The full opinion is titled The Florida Bar Re: Advisory Opinion — Medicaid Planning Activities by Nonlawyers (Fla., No. SC14-211, Jan. 15, 2015).