What The Gurus Say


    Today I talked with several of the top attorneys in the field of elder law and Medicaid planning to get their take on the new law, and what it might portend for attorneys who practice in this area.

Harry Margolis of Margolis & Associates and ElderLawAnswers.com

    I spoke this evening with Harry Margolis, founder of ElderLawAnswers. Harry predicts a windfall for elder law/Medicaid planning attorneys in the short run, and a murkier picture in the long run.
   "I think in the short run it will mean more business," he said. "People will be scared. Other attorneys who don’t practice this kind of law will be scared, and they will come to us. It’s a chance to get our names and expertise out there, and to get more business.
Small_939    "I’m less optimistic about the long run, because there are simply fewer things we can do for our clients. In the past, our best clients have been those facing a crisis. What are we going to tell them? ‘Gotta spend down.’ And how much can we charge for that advice? As to advance planning, all we can tell them is, you have to give it away earlier — and I don’t know how much that advice is going to be worth.
    "I’m sure there is going to be increased use of techniques like the Post Transfer Trust and the Personal Services Contract, but it’s hard not to imagine that, in the long run, this new law will mean less business."
    I asked Margolis what practice area might be attractive to elder law attorneys who will now need to find new markets.
    "Definitely special needs planning," he said. "This will be the biggest growth area and it calls for the same skills, the same knowledge base. I also believe elder law attorneys will have an affinity for the work, which involves serving families in need in many of the same ways elder law does."

Vincent Russo, past president of NAELA

Russo    I spoke today with Vincent Russo, past president of the National Academy of Elder Law Attorneys (NAELA). As a prominent elder law attorney on Long Island, NY, Russo has helped thousands of individuals and families facing catastrophic nursing home costs. In July of this year he testified before the United States Senate Special Committee on Aging. In his testimony, about the proposed law, which has now been passed, he told the Senators: "Making asset transfer penalties more punitive will mainly hurt seniors who are faced with horrific health and income security choices and who are acting in good faith."
    I asked Russo what planning tools would be left under the new law.
    “The first thing everyone needs to know is that until this measure becomes law, which according to our best estimate will be on Jan. 4, 2006, the old rules apply,” he said. “That means if your clients have been hesitating, you need to get them in now.
    “As to modifying our planning techniques, there are several areas we will have to explore. We are going to need to look at exempt transfers, and how they might be used. The new law will not affect transfers made for other purposes than Medicaid qualification, so we will have to look at that, as well as payments that might be made for less than full consideration, for example, a personal services contract with a child who is serving as caretaker to their elderly parent.”

Hal Fliegelman, long-time elder law attorney of Philadelphia and founder of MplanToGo

Hal_1   The following are comments from Hal Fliegelman of MplanToGo:
   "The doomsayers are out in full force. "Woe is me.  Thanks to Congress, Medicaid Planning is gone and we have been put out of business."  Cry. Moan. Sob. Grieve. Despair!
     "But not so fast.
     "The reports of Medicaid’s demise are premature and greatly exaggerated.  In fact, this new law represents a fantastic opportunity for us. Just imagine how many of our competitors will give up. Can’t you just hear the whole world crying ‘You can’t get Medicaid without going broke’ (just as they have always done) and we will be saying ‘Yes you can’ (Just as we have always done).      
    "It is true some of our favorite strategies no longer exist, but some of us have already come up with new ones. They won’t shelter as much, but a married person will still be able to shelter the house, a car, more than $95,000 and at least half of the remainder; while a single person will still be able to shelter at least half of his/her assets. Don’t you think that will sound sweet to the person who thinks everything must go?
    "Do you realize what good news this is for us? I predict significant growth for those who stick it out.   In fact, as soon as I heard the House had passed the conference version, I increased my sales projections by 50 percent and my profit margin even more. [There’s an old sales maxim: When you are the only one who has fish to sell, you can sell fish at filet mignon prices, especially when people are hungry and think there is no fish available].
    "So start gearing up. 2006 is going to be a fabulous year for us."

2 thoughts on “What The Gurus Say

  1. Thanks for the great entry Mark, though I think Hal might be wrong about saving half. Many now believe that the “half a loaf” strategy is lost under the new bill – that is my interpretation of the bill. as well.
    I for one do not see any loss of business in the future – especially if I continue to market from the perspective I have used all along to bring the elderly into my office which is: As we age, we all need a “legal check-up” – a major review of our assets, our income, our documents, our family dynamics and our values/goals to make sure that all are aligned. We need to look face-on at the two headed monster – death and disability – look at what would happen if we do nothing and then explore options. We need to look at ways to ensure that our assets go to our loved ones with the least erosion from taxes, court costs, disability expenses, predators (including in-laws!) and creditors. We need to look at alternative for paying for long term care and we need to look at services in our community to support us in our homes if we become disabled.
    Elder Law is so beyond Medicaid planning and the attorneys who limit their practices to Medicaid planning will go down unless they redefine. Yes, there are clients who call my office specifically for the purpose of “protecting assets,” but by the time our initial telephone conversation is over (I always speak to them before they come in), they understand that there is so much more to explore than just “protecting assets.” and they are excited about the prospect of the process.
    Also, the attorney who is well connected in the geriatric world (plug for my system – http://www.legalresourcesllc.com) can still assist their clients in accessing necessary services and professionals and bring the “peace of mind” that should be the cornerstone of any elder law practice and marketing strategy.
    The elderly are not going away – their needs are not going away – the solutions to the problems WILL change but that is all. I have no concerns about the future for Elder Law; and in fact, am quite optimistic.
    Meg Rudansky, J.D.
    36 Woodvale Street
    Sag Harbor, New York 11963
    631-725-4778
    631-725-8685 (fax

  2. I agree that some of our favored practice techniques will be altered, however, there will still be great planning opportunities for the distinguished planner.
    With the proposed changes that exist on the horizon, the focus of planning will of necessity readjust from what has been perhaps an overemphasis on asset preservation to the creation and maintenance of a long term care funding system that works for your client.
    We can still protect assets, predictably budget for the cost of care during the client’s lifetime, as well as, to control the post-mortem rate of reimbursement for life time care expenses.
    Bear in mind that so much of what we do is about positioning in the mind of the client. There will always be an opportunity for creative and effective planning.
    Pigs can still gain some degree of fat with proper planning but the careless hog is sure to be slaughtered.

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