Medicaid planning: Should your advice be best for your clients or society at large?

By Roccy Defrancesco

The Wealth Preservation Institute

The duty of any advisor is to do what’s in the client’s best interest, and any personal biases about the advice given needs to be left at home.

I’ve written a few articles over the years that have elicited some pretty nasty hate mail. The article that created the most hate mail was Medicaid planning using annuities is viable again.

Why hate mail? Because the article essentially told readers how to preserve a client’s assets for family members while at the same time getting the government to pay for their nursing home expenses.

You’d think I was evil for suggesting that advisors use the law to their client’s advantage. The typical comment read like the following: “How can you live with yourself? Telling clients how to re-title their assets so they can get the government to pay is immoral and bad for the society at large."

It was the “bad for the society at large” comments that really bothered me.

I will admit that when you help clients with Medicaid planning, you save them money and cost the U.S. government and the state money. In other words, you are using taxpayer dollars instead of the clients’ own money to pay for their care.

The ethical/moral dilemma

Because the federal and most state governments are broke, is it unethical, immoral or flat out wrong to give proper Medicaid planning advice to clients so they can preserve their assets for other family members and receive financial assistance from the government?

In short, not only is it not unethical, immoral or wrong, an attorney is mandated by his/her ethical code to provide the best Medicaid planning advice to clients, no matter how it affects the society at large.

Do financial planners or insurance agents have a different duty? I don’t think so. The duty of any advisor is to do what’s in the client’s best interest, and any personal biases about the advice given needs to be left at home.

While Medicaid planning is offensive to some or even many advisors, those feelings are not relevant if they prevent the client from receiving the best advice. If advisors want to tell clients their personal feelings while still telling them how to properly shift assets to qualify for Medicaid planning, I’m OK with that. The client can then make an informed decision.

It’s the advisor who intentionally withholds the best advice from clients that is unacceptable and, ultimately, can get themselves sued if their clients or their heirs find out.

For those who don’t like the laws of this land (like many who seem to take offense at proper Medicaid planning), take action to elect officials who will change the law. But don’t punish your clients by not using the laws of this land to their advantage.


My bottom line with this article is that if you are giving advice to seniors age 60 or older, you must learn Medicaid planning in order to give them the best advice.

If you don’t know Medicaid planning and you are selling life insurance, annuities, stocks, mutual funds or bonds to senior clients, your advice could be putting their assets at risk of Medicaid spend down (something that is not in your client’s best interest).