William M. Gatesman, Attorney at Law

William M. Gatesman assists clients in Maryland and D.C. in the areas of elder law and Medicaid planning, asset protection planning, special needs planning, estate planning, probate and estate administration, wills, trusts, powers of attorney, and health care decision making documents.  Mr. Gatesman is available to meet with clients in his offices in Rockville, Columbia, Frederick and Hagerstown, Maryland, and is available to make house calls as needed in those locations and in other areas of Maryland and D.C.

Call 301-260-0095 for more information or to make an appointment.

The purpose of this website is to educate consumers and their advocates regarding legal developments that may affect their lives. Mr. Gatesman has written the articles that follow on this website, organized by date of publication. To assist you in locating articles of interest, there is a search feature and a subject matter index in the column on the right side as you scroll down this page. You also may sign up to receive newly published articles by email in the newsletter signup box on the right.

Sheltering Assets to Maintain Housing Benefits

Various articles on this website address ways in which aged or disabled persons may protect their assets and still get government benefits such as Medicaid for long term care in a nursing home, or Medicaid for health care in the community.  By retaining accumulated assets or protecting assets one is about to inherit, an individual can ensure for herself a better quality of life, especially when the only other alternative is to fully impoverish oneself to retain government benefits.

One tool lawyers utilize to enable clients to shelter assets is a trust.  There are various types of trusts that can be employed depending on the individual’s circumstances, and each type of trust has its advantages and disadvantages.

For example, the law will allow a disabled person to keep his or her accumulated wealth to allow for a higher quality of life and to still obtain Medicaid benefits.  [Such opportunity is separate and distinct from the benefit under the Affordable Care Act which allows non-disabled people with low incomes to obtain Medicaid health insurance.  Moreover, this long-standing opportunity afforded to disabled persons likely will persist even if the President and Congress were to repeal the Affordable Care Act as they have threatened to do.]

Consider Mary, a 50 year old disabled individual, who, due to her disability, was never able to work, and who receives Supplemental Security Income (SSI) and is eligible for Medicaid benefits, both of which are means-tested programs.  Means-tested programs are benefit programs that will pay only if the recipient has very few assets, typically $2,000 or less.  Mary, who has been living with less than $2,000 is about to inherit $200,000.  Unfortunately, the deceased relative who has left such inheritance did not do estate planning to prevent such inheritance from causing Mary to lose her government benefits because she will have more than $2,000 after the inheritance is paid to her.

All is not lost for Mary, however.  Mary can work with an experienced attorney to create a special trust to hold her $200,000 inheritance in such a manner that it will not be counted as her resource for benefits purposes.  With such a trust in place, Mary will continue to have less than $2,000 in her name, continue to receive SSI (which she will spend each month for her personal needs), and continue to receive Medicaid to cover her health care needs.  Moreover, the trust assets can be used, not to make distributions directly to Mary, but rather, to pay for things Mary needs and for opportunities Mary can pursue.  One significant condition of this type of trust is that, if there are funds remaining in the trust when Mary dies, then the Trustee will repay the State for Medicaid benefits Mary has received during her lifetime.  But if the trust funds are used for Mary’s wants and needs during her lifetime, then she will have a better quality of life without losing government benefits, and if all the funds are spent for this purpose, then there will be no government payback.

The law governing the use of a trust in this manner is clear cut and well known to experienced elder law and disability law attorneys.  What is not so clear cut is whether such a trust may be used to shelter assets and still allow an individual to obtain or retain Federal or State housing benefits.  For example, if Mary, in addition to getting SSI and Medicaid, also received a voucher to enable her to pay her rent, the question arises:  Will Mary lose this benefit once she inherits the $200,000, even if she employs the type of trust discussed above?

A colleague of mine faced this very question recently and discovered that the law and regulations governing the housing benefit programs do not address whether using the trust described above, which enable Mary to shelter her inheritance for SSI and Medicaid eligibility purposes, likewise will shelter the inheritance and enable her to keep her housing benefits.

This lack of clarity is not new.  William M. Gatesman faced the same situation more than a decade ago.  Then as now, the law was not clear and the regulations did not adequately address the situation.  But a client needed to know, because she depended on her housing subsidy and losing it would have negative consequences for her.

That being the case, Mr. Gatesman researched the housing subsidy rules and called the director of the government office that administered the Federal/State housing subsidy program.  Gatesman found support in one of the housing department’s publications, which publication arguably suggested that using such a trust would allow his client to keep the inheritance and still get the housing subsidy in the same way that she, like Mary discussed above, could keep her SSI and Medicaid benefits.

Mr. Gatesman argued his case in a telephone call and a letter to the Director of the Rental Assistance Division of the Housing Opportunities Commission of Montgomery County, Maryland, which administered the housing benefit programs affecting his client.  As a consequence of that advocacy, the Director issued an Opinion Letter that concluded that Mr. Gatesman’s client could retain her housing benefit because the assets in the trust will not be counted as available to Mary for housing subsidy eligibility purposes.  Indeed, the Opinion Letter advised further that, except in certain circumstances which did not apply in the case at hand, the existence of the trust and the trust assets need not even be disclosed when applying to obtain  the housing subsidy.

One can read that opinion letter by clicking this highlighted text.  As is evident from this Opinion Letter, this issue was addressed a long time ago, in 2004.  Benefits law and practice is not a stagnant thing, and much has transpired over the past 13 years since the Housing and Opportunities Commission issued it’s Opinion Letter.  That being the case, one seeking to shelter assets and maintain eligibility for housing benefits needs to consult with qualified counsel to ascertain whether this Opinion Letter would still be applicable at this time and in the particular circumstances faced by the individual.  Nevertheless, this Opinion Letter serves as an historic legal determination that should be significant for lawyers who assist clients in preserving assets and in obtaining and maintaining eligibility for public benefits.

As a courtesy to my colleagues, for a limited time, I will include links below to other relevant documents.

Housing Opportunities Commission Opinion Letter

Text of Letter Soliciting HOC Opinion

Exhibit Attached to Solicitation Letter

Trustee’s Liability for Contractor’s Work

Whether you are a Trustee of a trust that owns real property, a Personal Representative of a decedent’s estate that holds real property, or simply a homeowner, it is important for you to know your potential liability when you engage a contractor to perform work on the property if an employee of the contractor gets hurt on the job.

Many home service contractors do not carry worker’s compensation insurance coverage for their employees.  This is especially notable with tree service contractors.  The same men who climb trees with powerful chain saws to cut limbs and tree trunks while hanging from a rope around their waists in one of the most dangerous home service professions often find it prohibitively expensive to pay the premiums for worker’s compensation insurance, and therefore do not obtain such coverage.

The problem with that is, if one of the workers is injured on the job, even if that person is an employee of the contractor, then the law may treat such injured worker as your employee for liability purposes.  And, unless you, as Trustee or homeowner, have worker’s compensation insurance to cover this particular type of worker – and obtaining such coverage for the once in a blue moon tree cutter or other home service contractor likely is not possible – then the potential liability is unlimited.

Suppose, for example, that the Trustee of a trust that owns real property hires a contractor to remove a tree, and the climber who is cutting limbs halfway up the tree with a chain saw, has an accident and loses his arm, or cuts a gash into his head, or falls out of the tree and dies.  With worker’s compensation insurance, the liability would be limited by law and would be paid by the insurance company, but if there is no such coverage, and the worker or worker’s estate seeks recovery from the trust, then the resulting liability could bankrupt the trust, and the Trustee could potentially be held personally liable to the beneficiaries of the trust for failing to exercise due diligence and engage a contractor who has worker’s compensation insurance.

The homeowner who hires a contractor with no worker’s compensation insurance likewise risks financial ruin should the contractor or one of his employees become injured on the job.  The same holds true for the Personal Representative of a decedent’s estate if there is real property in the estate and the Personal Representative engages a contractor to perform work on the property, which the Personal Representative might do to improve the property in order to sell it.

Therefore, it is important to closely scrutinize the terms of the engagement when hiring a home service contractor.  With respect to insurance, including general liability insurance, vehicle insurance, and worker’s compensation insurance, the Trustee, Personal Representative, or homeowner should obtain a currently dated Certificate of Insurance, directly from the contractor’s insurer, and addressed to the Trustee, Personal Representative, or homeowner.  One should review that certificate closely to ensure that the limits of coverage are sufficient and that there are no excluded persons that include those who will be on-site performing the work.

Also closely scrutinize the service contract itself.  For example, while the contractor may have sufficient insurance, the service contract may place the burden of any liability on subcontractors, in which case, if you as Trustee, Personal Representative, or homeowner agree to this term, the contractor’s insurance coverage may be worthless to you.  If that is the case, be sure to strike that provision from the contract and have both parties sign to ensure that you are holding the contractor liable for all workers performing under the contract between you and the contractor, regardless of whether the contractor employs subcontractors to perform the work.

William M. Gatesman advises clients regarding their financial and estate planning concerns, assists and advises Trustees, Personal Representatives, and other fiduciaries, and serves as Trustee over trusts for clients and their beneficiaries.  If you have any questions concerning this article or related matters, please contact us.

The Secret World of Medicaid Regulation

Potential clients sometimes ask William Gatesman whether they can pursue their legal matters themselves.  Often, the advice in response to such an inquiry is that the client would obtain a more favorable outcome using the services of a knowledgeable lawyer.  A key component of that advice is that the lawyer should be knowledgeable.

Unfortunately for the general public, when it comes to applying for Medicaid benefits, there is a limited pool of lawyers in Maryland who can be viewed as being truly knowledgeable about all of the nuances in the Medicaid eligibility rules.

This should not be the case.  Maryland law, and in particular, the Maryland Administrative Procedures Act, mandates that the rules governing such matters as the Maryland Medicaid program be promulgated and implemented through a transparent public process.  Through that process, such rules are to be disclosed and maintained in a manner to make them easily accessible to the public.

Unfortunately, with respect to the Maryland Medicaid program, some of the rules are complex, hidden, and accessible by only a few who know where and when to look for them.  One of the problems arises because Medicaid is a joint Federal and State program.  Notwithstanding that, the rules as they apply in Maryland (Medicaid rules vary state by state) should be put in place in accordance with the Administrative Procedures Act, however, the Maryland Administrative Procedures Act routinely is disregarded.  Indeed, a senior Medicaid official recently advised William Gatesman that there is an administrative freeze by the Maryland Governor that prohibits any action toward implementing new regulations.

So, then, how do Medicaid lawyers in Maryland know what are the rules that apply to their clients?  Sadly, sometimes the answer to that question is that some of those lawyers don’t know.

Consider the following case in point.  Some disabled individuals who have too many assets can still qualify for Medicaid if they use a certain type of trust to hold those assets.  This type of trust is referred to as a “d4a” trust.  Previously, such trust could only be created by the Medicaid recipient’s parent, grandparent, court appointed guardian, or by a court (in which case, creation of the trust could be costly).  This requirement imposed an unreasonable burden on competent adult disabled persons – why did the law not allow them to create their own d4a trusts?

After many years since d4a trusts became a possibility, Congress finally, in December, 2016, passed a law that allows competent adult disabled persons to create their own d4a trusts.  Notwithstanding that change in law at the Federal level , William Gatesman was concerned that competent adult disabled persons in Maryland might be snared in a trap if they sought to create such a trust themselves and then apply for Maryland Medicaid.  The reason for this concern is that the Federal rule change allowing self-created d4a trusts  has not, since the passage of  the law more than six months ago, been implemented in Maryland in any manner whatsoever – not by the passage of a regulation, not by the amendment of the Medicaid caseworker’s procedure manual, and not in any other manner.

That being the case, Mr. Gatesman  asked a group of Maryland elder law lawyers if they, too, were concerned about their clients getting “snared in a trap” by creating their own d4a trusts.  That inquiry sparked a discussion that revealed just how obscure are the Medicaid rules, even for lawyers who practice Medicaid law.  Some of the lawyers involved in the discussion were not aware of the rule change.  One sought out the Federal statute and discovered that, although the December, 2016, rule change is reflected in a published Public Law that is not easy to find, it is not yet reflected in the compiled statutes of the United States (at least those that are available online).

The discussion revealed further that, within the past week, more than six months following the passage of the law, the Federal agency charged with administering the Medicaid program sent a letter to State Medicaid regulators advising them of the new law and instructing them as to how to comply with that law.   That being the case, not only was it Maryland elder law lawyers (with the exception of a small number of them) who were not aware of this important change in the Medicaid rules, but it was the regulators of the Maryland Medicaid program themselves who only recently had become aware of the change.  Consequently, it was prudent for William Gatesman to be cautious lest his clients get snared in the trap of relying on a Federal law change before the State regulators were in a position to allow actions based upon such change.

It was during that discussion that a senior Maryland Medicaid official revealed, in an informal correspondence to a select few lawyers, that, due to the Governor’s administrative freeze, no Maryland regulation would be implemented with respect to this rule change, suggesting also that such administrative freeze would prevent the Medicaid regulator from revising its procedural manual utilized by Departments of Social Services who evaluate Medicaid applications and private Medicaid lawyers alike.  Instead, the only change that will be made is to list “the disabled individual himself” as one of the possible creators of a d4a trust on a checklist that is used when such trusts are evaluated.  This is hardly clear, bright line guidance to lawyers who advise clients concerning Medicaid eligibility issues, much less to the public.

There are other, equally obscure, or even more obscure, important Medicaid rules that have significant bearing on whether individuals will qualify for Medicaid in Maryland.

William Gatesman maintains relationships with other professionals and monitors significant changes in the law to stay abreast of the current operative rules and regulations, no matter how obscure they might be.

Don’t Let the Notary Public Skip a Step

Many legal documents, such as deeds, trusts, powers of attorney, and contracts, either require, or are made more legitimate, by having a notary public sign the document. This is referred to as “notarizing” the document.

In Maryland, a person who is a Notary Public must obtain a license, must be sworn in by an officer of the Circuit Court, and must follow certain rules in the exercise of the Notary Public’s powers. A Notary Public must ensure that she knows the person who is signing the document. This usually is accomplished by the Notary Public reviewing that person’s driver’s license or passport.

Then, after witnessing the individual sign the document, the Notary Public will complete what is known as a Notary Jurat, which is a section of the legal document in which the Notary Public enters certain information, including the expiration date of the Notary Public’s license, signs the document, and affixes his or her seal to the document, which seal often takes the form of a special ink stamp on the document page.

In addition to those actions, the rules governing the actions of a Notary Public require that the Notary Public maintain a “fair register” of all of the acts undertaken by the Notary Public. This is one step that often is overlooked. There are lawyers who also are licensed Notary Publics who will witness a client’s signature to a document but might overlook recording the action in a Notary Public fair register. Indeed, I have encountered some lawyer-Notary Publics who were unaware of the requirement to maintain a contemporaneous fair register.

The fair register is an important record because, if a client ever requested it, the Notary Public has an obligation to provide such client with a certified copy of the record of the act that was notarized. For example, some years after a legal document is signed, if there is a question as to the legitimacy of the signature, a party to the legal document may seek out the Notary Public to request a certified copy of the fair register entry memorializing the execution of such legal document. If the notary public did not make an entry in a fair register and did not maintain that fair register as required under the law and regulations governing Notary Publics, then it would be impossible to obtain such a certified copy at some future time.

Knowing these rules, a client who signs a document requiring notarization could make an appropriate inquiry with the Notary Public if the Notary Public did not ask the client to sign Notary Public’s fair register.

William M. Gatesman is both a lawyer and a licensed Notary Public, and is available to assist clients in both capacities.

Locating Deceased Person’s Assets in a Digital Age

More and more financial institutions are pushing their customers to forgo receiving paper account statements and instead receive all of their statements and account correspondence electronically. What happens, then, when the account holder dies?

In the age before digital communication, when someone died, if the identity and extent of the deceased person’s asset holdings was not apparent to the estate administrator, one simply had to wait a month or so to receive the decedent’s mail to discover most, if not all of the decedent’s financial accounts. Eventually, it would be apparent what accounts were owned by the deceased person.

All of that has changed for someone who does all of their financial business online, however. What happens, then, when a forward-looking, media-savvy loved one dies, and you discover that the deceased person received no paper financial statements, and kept all of her financial data on her computer rather than in paper files?

This problem was faced by a colleague of mine who is assisting with the estate of a deceased security-sensitive computer programmer who had all of his financial affairs on his computer, and who did all of his financial transactions by email or online, and who protected access to his computer and computer transactions with strong passwords that he did not share with anyone.

Because it may be hard to discover what assets the decedent owns for the reasons discussed above, I recommend that people not choose to receive their financial statements exclusively online and that they continue to receive paper account statements through the mail.

Because not everyone does this, however, what should one do if they have a family member who has died and whose financial life is locked away in a password protected computer?

When my colleague faced this issue, she put out a call to other lawyers seeking referrals to technology professionals who could assist in accessing the deceased person’s computer notwithstanding that access to the computer was password protected.

My colleague received the following suggestions:

One reference, https://www.compforensics.com/mark-lanterman, was identified as a national expert, and the referring party suggested that his services “might not come cheap.”

Another reference, https://www.forensicon.com, had been engaged by a lawyer “in a litigation setting, with good results.”

Another respondent to the inquiry advised that “A simple google search of computer forensic services in Maryland yields a few seemingly reputable agencies, namely: https://catzen.com/ and http://burgessforensics.com/”

Yet another attorney had previously engaged the services of SBG Computer Consulting (sbg_consulting@verizon.net) to assist in retrieving all of the business and personal computer data from a deceased person’s computer that had been deleted by someone before or after the person had died.

When someone dies leaving no evidence of their financial assets except for computer files that are not accessible to surviving family members and the estate administrator, then the estate administrator will be required to obtain technical assistance from professionals such as those mentioned above in order to inventory and take control of the deceased person’s assets.

Please note that neither I nor the Gatesman Law Office have had any experience with the technical professionals referenced above, and my mention of them in this article is in no way an endorsement of those service providers. Nevertheless, I have included their contact information as a point of reference for anyone seeking to do research in this area.

Moreover, I would recommend that any person seeking to access a decedent’s financial data stored on the decedent’s computer first consult with legal counsel well versed in dealing with decedent’s estates to ensure that such person not take a misstep with respect to the decedent’s estate.

Are You Paying Too Much to Apply for Medicaid?

The requirements imposed upon individuals seeking Medicaid benefits to pay nursing home costs have become less onerous in recent years.  For many years, Medicaid applicants were required to submit monthly statements for every bank and investment account for every one of the 60 months preceding the filing of the Medicaid application.  Under that regime, someone with only 4 bank accounts would have to submit 240 individual account statements.  Then, once those statements were submitted, they were reviewed by a Medicaid caseworker who was on the lookout for any “questionable” transactions.

“Questionable” transactions include unexplained deposits and substantial expenditures.  Therefore, unless the source is obvious from the account statement, any deposit showing up on those 240 statements would be questioned by the Medicaid caseworker seeking to ascertain the source of the funds deposited, and any payment of $1,000 or more likewise would be called into question.  The problem is magnified if the applicant or the applicant’s spouse had any additional bank or investment accounts.

That being the case, in order to be prepared to address a Medicaid caseworker’s questions, lawyers assisting Medicaid applicants under the old system would review all of the bank statements and seek explanations from the applicant or applicant’s family for any transactions that likely would be questioned.  That process could be time consuming, and, if the law firm performing such review billed the client on an hourly basis, then the legal fees to pursue the Medicaid application would be high.

In recent years, however, the Medicaid application process has been streamlined.  No longer is a Medicaid applicant required to submit 60 individual account statements for each of the 60 months preceding the month the Medicaid application is filed.  Now, applicants need only submit a few statements for the most recent months, and then a single statement for a particular month for each of the preceding five years.  Hence, under current practice, rather than submitting 60 statements for each account, an applicant only has to submit 8 statements, and it is only those 8 statements that will be scrutinized by the Medicaid caseworker.   Thus, for a Medicaid applicant with four accounts, the number of statements needed to be submitted for scrutiny was reduced from 240 to 32.

If one were to continue to operate under the old system and submit 60 monthly statements for each account, and then spend the time to closely scrutinize each of those statements and any transactions that might be called into question, then such person would  be doing extra work for little or no added benefit.

Click here to read the rest of the story…

The Steps to Selling Your House Quickly

I often work with people who, in the administration of the estate of a deceased loved one, find themselves in the position of having to sell the deceased person’s house. Useful to such clients, and to anyone else who is selling a house, are these tips, the Steps to Selling Your House Quickly, which tips one of my mentors, who has much experience investing in and selling homes, shared with me.

Click here to read the rest of the story…

The Fox is Guarding the Hen House in a Maryland Guardianship

In Maryland, if one asks a Court to appoint a guardian for a person who is alleged to be disabled (the “alleged disabled person”) where such alleged disabled person is believed to be unable to manage his or her own affairs, the Court will appoint a lawyer to represent the alleged disabled person (the “court appointed counsel”). Sometimes, if there is a need to take immediate action to protect the alleged disabled person, the Court might, on the strength of a petition alone, appoint a temporary guardian for the alleged disabled person, which temporary guardian often is a lawyer chosen by the court.

In theory, the court appointed counsel and the temporary guardian are fiduciaries whose job it is to protect the interests of the alleged disabled person. Sometimes, however, it appears that such court appointed fiduciaries do not fulfill that responsibility.

Consider the following circumstance.

A health care facility is caring for Husband. Wife is unhappy with the facility’s treatment and wants husband to come home, and for the moment is withholding payment. Wife holds a financial power of attorney and a medical power of attorney for her husband, meaning that she has authority to manage his personal, medical, and financial affairs.

Click here to read the rest of the story…

Medicaid Updates Transfer Penalty Rule

If one applies for Medicaid to pay for long term care in a nursing home, the state will look to see if the applicant made any gifts in the five years preceding the Medicaid application. If so, then (with some exceptions addressed in various articles on this website) a period of Medicaid ineligibility will be imposed.

For many years before 2014, the period of ineligibility was determined by dividing the amount of the gift by $6,800, which amount was supposed to be the average monthly cost of care in a nursing home. In July, 2014, that number was changed to $7,940. Medicaid has again updated the divisor to take into account Nursing Home care cost inflation.

Effective July 1, 2016, the divisor to determine the number of months of Medicaid ineligibility for gift transfers is $8,684, which means that one would be ineligible for one month for every $8,684 in gifts made during the five years preceding the Medicaid application.

Bear in mind that the term “gift” means any transfer of resources with respect to which the transferor did not receive full value. Thus, if a person sold her house for less than it’s fair market value (Medicaid uses assessed value or an appraisal to determine fair market value), then Medicaid will treat the difference between the sales price and the deemed fair market value to be a gift transfer even if such sale was made to a third party in a bona fide arms length transaction.

We at the Gatesman Law Office endeavor to stay at the cutting edge of new developments in Medicaid law and policy.

Should you have any questions as to how this new policy might affect you or a loved one, please contact us by clicking the Contact link on this website.

Bill Gatesman

« Previous Entries