April 30, 2015
William M. Gatesman assists clients in Maryland and D.C. in the areas of estate planning, probate and estate administration, elder law and Medicaid planning, asset protection planning, special needs planning, wills, trusts, powers of attorney, and health care decision making documents. In Western Maryland, Mr. Gatesman represents clients through the Law Offices of Michael G. Day & Associates
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, 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.
April 30, 2015
In order to get Medicaid to pay for one’s long term care costs in a nursing home, one can have no more than $2,500 in assets. While social security and pension income is deposited into one’s account each month, as long as that money is spent before the end of the month, bringing the account balance below $2,500, then Medicaid benefits will not be affected. One routinely spends such income each month because Medicaid requires that the bulk of the Medicaid recipient’s monthly income be paid to the nursing home as a contribution to the individual’s cost of care.
A problem arises, however, when one’s income deposit is made on the last day of the month, as some pension payments are structured, because Medicaid will look at the account balance as of the first moment of the first day of the following month to determine whether the individual has more than $2,500.
For most Medicaid recipients, their income is deposited by direct deposit near the beginning of the month, and there is time to spend that income before the last day of the month. Such is not the case for individuals who receive their income on the last day of the month, however. If that income is high enough, then such individuals could find themselves in the position of never being able to qualify for Medicaid. For example, an individual who has no assets but who receives a pension of $2,501 by direct deposit on the last day of each month would not be able to receive Medicaid benefits by the application of this rule, even if such person incurs nursing home costs of $8,500 each month.
For this reason, one Administrative Law Judge in Maryland, after considering an appeal of the denial of Medicaid benefits for someone whose income was deposited on the last day of the month, issued a legal opinion stating that such person could spend that income in the following month and still be eligible to receive Medicaid to cover the nursing home costs because it was simply impossible to spend, before the end of the month, funds that did not even enter the account until the last day of the month (and which funds did not post to the account until the close of business on that last day).
Unfortunately, unlike most court opinions, Administrative Law Judge opinions do not serve as binding precedent which must be followed by other Administrative Law Judges who hear future cases dealing with the exact same issue. That being the case, there have been a number of appeals following that favorable Administrative Law Judge opinion in which the individual seeking to obtain Medicaid benefits was denied Medicaid coverage for the mere reason that such individual had more than $2,500 on the first moment of the first day of the month following a month in which that person’s income was deposited by direct deposit on the last day of the month.
This is a problem that calls out for a regulatory fix, but in the meantime, there are steps one can take to ensure that the Medicaid applicant’s account balance is below $2,500 on the first day of the month, even in instances where such individual receives a direct deposit of income on the last day of the preceding month. While those strategies are beyond the scope of this article, suffice it to say that if you or a loved one requires nursing home care, and pension income is deposited to the bank account on the last day of the month, then certain financial arrangements have to be put in place to ensure that such income deposit does not cause the permanent loss of Medicaid benefits for long term care in a nursing home.
The Gatesman Law Office is available to assist clients in responding to circumstances such as these that would cause Medicaid ineligibility through no fault of the person seeking such benefits for long term care in a nursing home.
January 4, 2015
In general, a Personal Representative of a decedent’s estate may not pay legal fees out of the probate estate without first getting approval from the Orphan’s Court overseeing the estate administration. A Personal Representative has to be careful about this rule. For example, if the Personal Representative hires a lawyer to prepare a deed, oftentimes, the deed preparer will simply send a bill for services without notifying the Personal Representative of his or her duty to get court authorization to pay that bill. It would be improper for the Personal Representative to simply pay that bill without obtaining court authorization to do so.
Similarly, a Personal Representative should get court authorization to pay any legal fees incurred before death. There are two exceptions to obtaining such prior authorization. Some might argue that such authorization would not be required if the lawyer whose fees are being paid files a claim in the estate for such fees, and the Personal Representative pays the claim, which payment is reflected on an estate administration account (the argument being that such payment is the payment of a claim and not payment of legal fees, per se); however, the conservative way to do so would still be to obtain court authorization, or to pay such amount using the method discussed in the paragraph below.
Another method for paying legal fees incurred by the decedent before death is for the Personal Representative to provide all interested persons and all unpaid creditors with a Notice of the Personal Representative’s intention to pay such legal fees. That notice will provide the interested persons and unpaid creditors with a time period in which such persons could object to such payment, and if such objection is properly and timely made, the Orphans Court will hold a hearing to determine how much of such fee is to be paid using estate funds. If no objections are made within the allowable time, however, then the Personal Representative may pay such legal fees incurred before death with no further court action. There is a particular rule of court that allows legal fees to be paid in this manner.
William M. Gatesman is skilled in the various methods of paying legal fees from a probate estate and assists clients with the proper administration of estates, including the payment of legal fees using estate assets. As stated elsewhere on this website, these article are of general interest and readers should not consider these articles to constitute legal advice. William M. Gatesman stands ready to give legal advice to particular clients in jurisdictions where he is licensed to practice law. Please contact Mr. Gatesman if you would like to obtain legal advice regarding the matters addressed on this website.
October 25, 2014
Many of the articles on this website discuss obtaining Medicaid benefits to pay for long term care in a nursing home. Medicaid benefits also may be available to pay the costs at other care environments, such as assisted living. Some of these articles address the financial eligibility rules for Medicaid, discussing what one can and cannot keep and still qualify for Medicaid benefits.
One significant asset is one’s home property. One is allowed to keep his or her home and still qualify for Medicaid as long as that person resided in the home property prior to entering the long term care facility and states (on the Medicaid application) an intent to return home (even if such intent is highly unlikely ever to be fulfilled).
Given the high value of even a modest home in some parts of Maryland, it is important to be aware that Medicaid imposes equity value limitations on an exempt home property. Currently, one is allowed to keep as an exempt home property a residence with an equity value of $543,000 or less (which amount is adjusted annually to take into account inflation). Market value is reduced by any liens or encumbrances (such as a mortgage) on the property to determine equity value.
Moreover, the equity value limits do not apply where the Medicaid applicant’s spouse, disabled child, or child under 21 resides in the home property, and the equity limit also will not apply to a home property titled solely in the spouse’s name.
Given the very high value of homes in some parts of Maryland, it is important to keep in mind this equity value limitation on home property in the event you or a loved one should require Medicaid benefits for long term care.
September 3, 2014
William M. Gatesman is assisting a client with the probate of her mother’s estate. Mother died after she received Medicaid benefits for her care in a nursing home. The estate owns valuable real property, which was mother’s home property.
The Maryland Medicaid authorities have filed a substantial claim in the estate for many tens of thousands of dollars to recover the Medicaid benefits the State paid on mother’s behalf, which claim is allowed by law. Mother’s will divides her property among her three children, one of whom is disabled and receives Social Security Disability benefits.
The Medicaid rules provide that the State may not make a claim against the estate of a deceased Medicaid applicant if such person is survived by a disabled child. It does not matter that other children who are not disabled will also receive property under the decedent’s Will. However, this is not automatic, and the Personal Representative of the Medicaid recipient’s probate estate must formally disallow the State’s claim and then provide convincing evidence that the estate qualifies for this special rule that disallows a Medicaid claim in the estate.
Mr. Gatesman has been successful in getting the Medicaid claim dismissed in this circumstance.
Another, often overlooked rule also allows for the preservation of substantial assets by negating a claim by Medicaid after a Medicaid recipient dies. The Medicaid rules allow a person who gets Medicaid benefits for nursing home care to keep his or her house, but the State will put a lien on the house owned by the Medicaid recipient. However, under the Medicaid rules, any such lien will be negated if the individual returns home and ceases to receive Medicaid benefits before death.
Therefore, if, rather than dying in a nursing home, the costs of which are being paid for by Medicaid, the individual returns home for hospice care before dying, it may be possible that the State’s ability to assert its lien will be abolished.
William M. Gatesman is well versed in these and other strategies to preserve assets that otherwise might be lost to a Medicaid claim in a probate estate.
Another important rule that family members of a deceased Medicaid recipient should keep in mind is this. While probate law in Maryland places a time limit during which a creditor of a decedent may make a claim in a deceased person’s estate, there is a special rule that gives Medicaid greater leeway in making a claim and there even is a rule that will give a Medicaid claim higher priority for payment over other estate claims in certain circumstances.
In general, a claim in an estate is barred if not properly presented by the claimant within six months following the decedent’s death. The State Medicaid administration, however, may make a claim within six months following the appointment of the Personal Representative of the estate, even if such time is more than six months after the date of death.
Also, State claims for reimbursement of Medicaid benefits paid for certain state hospital costs have a higher priority for payment than other claims in an estate. If a Personal Representative disregards this rule where there are insufficient assets to pay all the estate creditors (as is generally the case in an estate of a deceased Medicaid recipient), then improper payment of claims could result in the Personal Representative incurring personal liability for any shortfall in the payment of the State’s Medicaid claim.
William M. Gatesman is well versed in these special rules affecting the estates of deceased Medicaid recipients and he can assist you and your family in navigating the hazardous waters of administering an estate of a deceased person who received Medicaid benefits during lifetime.
July 1, 2014
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 that I will address in a later article) a period of Medicaid ineligibility will be imposed.
For many years, 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. That divisor has been updated.
Effective this date, July 1, 2014, the divisor to determine the number of months of Medicaid ineligibility for gift transfers is $7,940.
The Maryland Medicaid authorities publish this information as Schedule MA-6, a copy of which you may download to your computer by clicking here: Schedule MA-6 Average Nursing Home Costs
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.
March 1, 2014
Many people are aware of Living Wills and Advance Directives, legal documents that allow people to make an advance determination about end of life care should they be unable to make a decision or communicate with their doctors.
Now, under Maryland Law, there is another document to direct health care providers with instructions as to one’s care alternatives, including end of life treatment: the Maryland Order for Life Sustaining Treatment form, more commonly referred to as the MOLST form. The MOLST form is a doctor’s order concerning what actions to take with respect to life sustaining treatment.
Most people admitted to a hospital or nursing home, and some other health care facilities, will be confronted with the fact that a MOLST form will be completed for them. The purpose of the MOLST form completion process is to facilitate informed consent, and there should be an appropriate physician-patient discussion (or in some instances physician-health care agent discussion) concerning what actions to take in particular circumstances.
Unfortunately, many people find that they are given a MOLST worksheet to fill out and on which to make particular choices without the opportunity to have a proper informed consent discussion. Once that worksheet is turned in to the health care provider, a MOLST is prepared and signed by a doctor.
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September 29, 2013
If an out of state resident dies owning real property in Maryland, can the executor of the estate simply transfer the Maryland property with a deed? In many states other than Maryland, the executor would be required to open a probate estate in the deceased individual’s home state and also open a second probate estate in the state in which the real property is located, this latter probate proceeding being referred to as “ancillary administration.”
While the executor of the out of state decedent’s estate can do an ancillary administration in Maryland as well, there is a much simpler process available under Maryland law.
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May 31, 2013
Parents have traditionally helped their adult children or their grandchildren in times of need. If an adult child faces foreclosure, for example, many parents with sufficient resources provide financial assistance to help their child avoid financial devastation. Others make significant gifts to assist grandchildren with their college education costs.
Unfortunately, the Medicaid rules in Maryland provided that any transfer of funds for which no return was received was assumed to be for the purpose of avoiding nursing home costs, assumed to be for the purpose of depleting one’s resources so Medicaid would pay for those nursing home costs.
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March 1, 2013
Mom is in a nursing home. As part of an asset preservation plan, Mom’s house will be transferred to her children and she will apply for Medicaid benefits.
In digging into the matter, however, the family discovered that “Mom’s house” actually is titled in Dad’s sole name (Dad died in 1989) and Dad’s former wife, as co-owners. Mom and Dad have resided in that house since they were married and everyone assumed that when Dad died, Mom owned the house (as is typical when a husband and wife live in a property that they own together). However, Mom never was on the deed.
To make matters worse, Dad died without a will and nobody bothered to open a probate estate in 1989 to deal with the real property. Even more complicated is the question as to whether Dad’s former wife survived him, which would mean that the house belonged to someone else, and not to Mom.
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