Attorney Is Disbarred in Spend-Down of Incapacitated Client's Assets

The Minnesota Supreme Court disbars an attorney who in the process of spending down the assets of a of a client with dementia engaged in self-dealing, evaded state sales tax, made dishonest omissions on two Medicaid applications, and misappropriated client funds. Petition for Disciplinary Action Against Peterson (Minn., No. A05-646, June 27, 2006).

Mildred Johnson, an elderly widow, retained attorney Brian J. Peterson to prepare her will, and later Mrs. Johnson designated him as her attorney-in-fact. In December 2002, Mrs. Johnson was diagnosed with moderate dementia and was admitted to a nursing facility. Soon after her admission, Attorney Peterson began spending down Mrs. Johnson's estimated $100,000 in assets prior to her application for Medicaid. Because Attorney Peterson was suspended from the practice of law at that time, he retained another attorney "protect [Johnson's] interests."

The spend-down included the purchase and eventual sale to Attorney Peterson of two vehicles, as well as the purchase of furniture, sculptures, and a sound system. Attorney Peterson also attempted to establish a pooled trust which he testified was intended to shelter Mrs. Johnson's remaining assets. Attorney Peterson was subsequently convicted of evading the sales tax in connection with one of the car sales. An Office of Lawyers Professional Responsibility referee concluded that Attorney Peterson had violated rules of professional conduct, which included failing to disclose all of Mrs. Johnson's assets on Medicaid applications. Noting that Attorney Peterson had a prior history of professional misconduct, the referee recommended disbarment.

The Supreme Court of Minnesota agrees that Attorney Peterson should be disbarred.

For the full text of this decision, go to:https://www.lawlibrary.state.mn.us/archive/supct/0607/opa050646-0727.htm.

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