THE ETHICS OF MEDICAID PLANNING
An article by:  Attorneys David H. Ferber and Edward D. Beasley

We proudly admit that "Medicaid" planning (i.e. helping folks protect their assets from a nursing home stay) is part of our practice. What we are often amazed at is the double standard between our "Medicaid" planning to help average folks save some of their assets and our "traditional" estate planning for wealthy clients, who likewise, desire to save as many of their assets for their heirs as possible.

Congress specifically passes laws which give huge estate tax breaks for the wealthy. A technique like Qualified Personal Residence Trusts (QPERT) may be used to help a couple get their home on Lake Winnipesaukee out of their estate thus, reducing their estate tax liability by hundreds of thousands of dollars. (We do not do QPERTS or Limited Family Partnerships because they exceed our level of expertise and they vastly exceed the needs of the majority of our clientele). By using the most basic of estate planning strategies, a married couple may pass up to $1,300,00 to their heirs tax free when failure to do the most basic planning would cost that couple approximately $230,000 in federal estate taxes.

We are in favor of all the above mentioned strategies because they help folks utilize the laws Congress has passed to save their assets from the government. We commend, not criticize, those exceptional lawyers with the skills and expertise to maneuver within the legal parameters of the tax code and prepare QPERTs and Family Limited Partnerships. What amazes us, however, is when we utilize similar laws, passed by the very same government, to assist those worried about the loss of everything to a nursing home stay, we are sometimes criticized. The laws apply as equally to the wealthy as to the folks of average means; utilizing these laws for average folks to save assets from a nursing home stay (often when a loved one is already in a nursing home - and routinely immediately without the need to wait 3 to 5 years) is not only generally ethical, it is in our opinion, our legal, ethical duty to our clients seeking assistance in this area. After all, what really is the difference - saving a wealthy person's home on Lake Winnepesaukee from the government or saving an average person's modest home from the same government? We guess it's all in the eye of the beholder.

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