N.H. Bill Targets Advisers Who Help Elderly Shield Assets from Medicaid

January 26, 2006

Critics are questioning the constitutionality of a proposed crackdown in New Hampshire on lawyers and financial advisers who help the elderly shield assets so they can qualify for Medicaid.

Critics told a Senate committee this week that criminal prosecution of someone for advice they give to others is unconstitutional in most cases. They also cited a 1997 ruling in New York on legislation similar to the bill in New Hampshire.

Senate Majority Leader Robert Clegg is sponsoring the bill, which would authorize misdemeanor charges against anyone who helps someone transfer assets knowing that the transfer would or could make the person eligible for public assistance.

“There are people who have the assets and ability to pay the bills, and then they turn around and become a ward of the state _ and the working man pays the bills,” Clegg told the Senate Judiciary Committee.

The New Hampshire Bar Association opposes the bill. Lawyer John MacIntosh said advising clients to do something illegal already is a crime. “We lose our license for that,” he said.

Estate planner David Ferber said the bill is based “on very faulty premises and bad information.”

He said many of his clients have limited assets and are simply trying to prevent their spouses from becoming impoverished if something happens that requires them to enter a nursing home.

“They don’t want to be on the public dole,” Ferber said. “They don’t want to be on Medicaid, but they also don’t want to go bankrupt.”

In most cases, the state is entitled to reimbursement from the estate after the second spouse dies, he said.

Nursing home costs often run well over $50,000 a year and can last for years. People whose income and assets are low enough can have their bills paid by Medicaid, a state-federal program that provides health care for the poor and disabled.

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