November 21, 2016
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.
First, pay attention to the curb appeal of the house. The moment a potential buyer drives up, the house should look neat and tidy, and it should appear to the prospective buyer, before she even sets foot into the house, that the property has value. Then, once the prospective buyer enters the house, she should find the space clean and tidy and all obvious defects should be fixed. There should be clean curtains or dust-free hanging shutters on the windows.
Pay Attention to the Kitchen. The astute reader will note that I used the pronoun “she” when referring to the buyer in the paragraph above. That was a conscious word choice on my part because, as my mentor emphasized to me, one who markets a house for sale should market the property to a woman. As my mentor explained it, when a couple buys a house, it is the wife who typically has the final say as to which house is chosen. That being the case, the seller should pay attention to the kitchen when marketing the house. The kitchen should be above average, and it must have a dishwasher. In order to ascertain whether the kitchen is above average, the seller should engage a realtor who sells houses in the price range for which the house will sell. Such a realtor would be best suited to advise the seller as to how well the kitchen stacks up to other houses in the target market.
Lest you think the above paragraph has a sexist tilt, it is important that the kitchen be above average whether it is a man or a woman buyer who will make the final purchasing decision. As my mentor says, “you live in the kitchen, not in the bathroom.” That being the case, any pre-sale improvement budget should be focused on the kitchen, it being sufficient that the bathrooms be clean and serviceable. While that adage may not ring true in the ultra high end housing market where master bathrooms are the size of bedrooms in other houses, it is a good general rule of thumb for those seeking to sell residential real property.
Staging the House. The seller should set up the house to make it most attractive for potential buyers. If rooms are filled with clutter, on the one hand, or are left empty, on the other hand, it leaves the impression that the rooms are small. It is particularly important to stage size-challenged rooms. For example, the seller should place in a small dining room a dining room suite of furniture that fits the dimensions of the space. This strategic removal of clutter and placement of furniture is referred to as “staging” a house to make it more attractive for potential buyers.
The master bedroom should be staged with a bedroom suite that includes a king-sized bed, if possible. For a house with very small rooms, the seller could stage the master bedroom with a queen sized bed and a suite of furniture that does not overwhelm the space. My mentor suggests that the appearance of the master bedroom is of utmost importance and that potential home buyers are less interested in the “kid’s rooms.” Nevertheless, those lesser bedrooms likewise should be staged with furnishings that make the space appear most desireable because, as stated above, a vacant room will seem to be smaller than a room that contains the essential furnishings to make it obvious that such room, regardless of its size, is large enough for its intended purpose.
Also, when deciding how to stage the house, take care not to move furniture or pictures that have been in place for a long time lest you expose carpet or patches of the wall that are of a different color than the rest of the surrounding surfaces, which changes in color accrue over time as the space is exposed to sunlight and day to day living.
Price the House Right from Day One. As a general rule of thumb, it costs 1% of the selling price per month to own a house, so it is best to sell the house quickly and not let it sit on the market. In order to accomplish this goal, the house must be priced right on day one. Indeed, a seller can be confident that potential buyers will know the prices for which houses are selling, especially in this internet age, and such potential buyers can easily identify, and pass on by, houses that are not competitively priced.
In order to achieve the objective of pricing the house right from day one, the seller should work with a realtor who sells a lot of houses in that particular price range.
Offering Practical Client Representation. By following these steps, a home seller will greatly improve the chances of selling the real property quickly and for top dollar.
In addition to assisting clients with managing the administration of an estate when a loved one dies, William M. Gatesman is prepared to provide practical suggestions, such as those addressed above, to ensure that the estate administration is carried out smoothly and efficiently. Mr. Gatesman offers such practical perspective in all his areas of practice to provide the best service and value to his clients.
September 16, 2016
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.
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August 31, 2016
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.
December 1, 2015
It is a well established principle of the Maryland Medicaid rules that certain jointly owned assets such as stocks or real property will not be counted as available resources to a nursing home resident who applies for Medicaid benefits if the other joint owner refuses to participate in a sale of the property.
For decades, such assets have been disclosed by nursing home residents on their Medicaid applications and such assets have been valued at zero for purposes of determining Medicaid eligibility.
Recently, however, a Medicaid applicant was denied Medicaid coverage for nursing home care because the applicant owned stock, in certificate form, with her son in joint ownership, even though the son had refused to participate in a sale of the stock. Ordinarily, such a denial by a Medicaid caseworker would be overturned when the case was appealed to an Administrative Law Judge, but in this case, the Administrative Law Judge ignored the specific regulation in the Maryland Medicaid Manual that explicitly states that jointly owned stock should not be a countable asset where the joint owner refuses to sell.
Such denial has implications, not only for the particular individual whose Medicaid application was denied, but for Medicaid applicants statewide. Indeed, this case has been appealed to the Circuit Court of Maryland where a senior Assistant Attorney General, representing Maryland’s Medicaid authority, the Department of Health and Mental Hygiene, essentially has requested the Circuit Court to issue a decision that radically revises the long standing Medicaid policy concerning such jointly owned assets.
If the Circuit Court were to uphold the decision of the Administrative Law Judge in this particular case, then it would shroud the process of dealing with jointly owned assets in a cloud of uncertainty. No longer would Medicaid applicants and their advisers be able to act with certainty regarding jointly owned assets, as there would exist the possibility that Medicaid caseworkers could arbitrarily ignore the applicable rule on the strength of judicial precedent.
This is not the proper way for the Medicaid authorities to change their policy. The proper way is to propose rule changes, either by changing the Code of Maryland Regulations, or by changing the Maryland Medicaid manual. Simply leaving a rule in place that exempts joint assets from consideration, but then attacking such an arrangement by imposing Medicaid ineligibility on a case-by-case basis on unsuspecting Medicaid applicants is bad public policy.
The State’s efforts to deny benefits in the case under discussion in this article is an example of such bad public policy.
William M. Gatesman is following the progress of this case closely and will inform the readers of this website of any new developments as they arise.
In the meantime, Mr. Gatesman stands ready to assist clients with prudent Medicaid eligibility and asset protection planning in the context of a changing landscape.
August 20, 2015
Mother dies with a will leaving all of her assets to her three children in equal shares. One of her adult daughters receives Medicaid benefits because her assets are less than $2,000 and she has a very low income due to a disability. Such daughter is expected to receive a distribution of $25,000 from mother’s estate. This will cause daughter to lose her public benefits, which will be disastrous for daughter given the very high costs of her medications.
While daughter could petition a court to create a special type of Supplemental Needs Trust, known as a “d4a trust” and once she receives the distribution from the estate, deposit the funds into such trust, there are significant costs to establishing such a d4a trust, and there are administrative burdens associated with such trust, including annual reporting to the State Medicaid authority. Moreover, a d4a trust requires payback to the state for any Medicaid benefits if there are funds remaining in the trust when the trust beneficiary dies. Given the amount to be distributed, one must weigh whether it is worth the cost of setting up a d4a trust if there are other less costly alternatives.
Fortunately, Maryland law provides an opportunity for a trust to be created in a simpler way. Under the Maryland Discretionary Trust Act, a trust may be established for a beneficiary, and the assets in the trust will not be considered to be available resources for Medicaid purposes. Moreover, unlike a d4a trust, there is no requirement to pay back Medicaid for benefits received during lifetime after the beneficiary dies.
While Mother in her will could have provided for a Maryland Discretionary Act trust for daughter, she failed to do so. Nevertheless, the Maryland Discretionary Trust Act provides that “any person having a right to transfer property to another person may create a trust as a transferor under [the Maryland Discretionary Trust Act].” Under this law, the term “person” includes any legal entity, and a probate estate is a legal entity.
William M. Gatesman presently is working with clients to come up with creative solutions to allow estate beneficiaries to retain their essential public benefits where the decedent’s will did not provide for asset protection in light of those public benefits. Establishing a Maryland Discretionary Trust Act trust is one of the tools in Mr. Gatesman’s tool kit to achieve the objective of protecting a beneficiary’s eligibility for public benefits.
August 6, 2015
Some workers who have received judgments in their favor from their former employers for work related disease or injury, such as asbestos related injuries or coal mining related diseases, find that the judgments are paid out over time, sometimes in the form of small amounts paid now and then over a period of many years. Some of these individuals have died and their probate estates have been wrapped up and closed. Then, out of the blue, another check arrives with a payment on the injury or disease settlement.
Once such check arrives, notice must be given to the Register of Wills in the county in which the estate had been opened, a supplemental inventory and account filed, and distribution made (with the payment of an additional probate fee in some circumstances). If a lawyer assists with this process, there will be legal fees as well. This is a cumbersome and costly endeavor, sometimes for a very small amount of money.
This continuous process of reopening the estate each time a settlement check arrives can be avoided with the proper assignment of future settlement payments to the beneficiaries of the estate when the final estate administration account is filed and the estate closed. Such assignment can grant the Personal Representative of the estate continuing authority to transact checks to make the distributions to the beneficiaries.
The Gatesman Law Office assists clients with the process of simplifying life for estate beneficiaries by arranging for the distribution of such settlement awards that might be received after an estate is closed without the necessity of continually filing supplemental inventories and accounts year after year.
October 27, 2012
The Maryland legislature once again has tinkered with the law governing powers of attorney in Maryland. That law includes Power of Attorney Forms, which if used, or if one’s power of attorney is “in substantially the same form” as one of the form documents, then the law bestows certain rights on the holder of the power of attorney, namely, the right to obtain payment of one’s legal fees from the person or institution who refuses to honor the power of attorney where a legal action is taken to compel acceptance. This right to legal fees differs from the general “American rule” of jurisprudence which holds that each litigant in a legal action must pay his own legal fees.
Unfortunately, the forms in the statute are generally not sufficiently comprehensive and lack certain important provisions.
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October 13, 2012
There are several new laws affecting probate in Maryland that became effective October 1, 2012. This article will address those statutory changes.
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May 24, 2012
Father, who had been enjoying late middle age, had a brain aneurysm and now is in a permanent coma. Unfortunately, he did not have a power of attorney or advance directive, so his adult son could not access his bank account, in which he had $20,000. He has no other assets. Father’s hospital and nursing home bills now exceed $300,000.
Son applied for Medicaid for his father but was denied benefits because Medicaid will not be allowed if Father has more than $2,500. Unfortunately, without a power of attorney, no one has the authority to spend the funds in Father’s bank account so that he can get Medicaid benefits.
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February 10, 2012
Mr. GoodSon is in a bind. His mother has been in a nursing home for over a year. He applied for Medicaid when mother first entered the facility, and although the Medicaid caseworker indicated to him that the application was fine, she ultimately denied the Medicaid application because mother had a few hundred dollars too much in her bank account. So GoodSon reapplied for Medicaid. This time, he could not get all the bank statements requested by the Medicaid caseworker from the bank. GoodSon again got the message not to worry about it, but in the end the Medicaid application was denied for failure to submit all the requested information
You’ve heard the old adage, “the third time is a charm”. So it was in this case, too. However, while the third Medicaid application was successful and Medicaid was granted, it was granted with a 6 month penalty period, or period of Medicaid ineligibility as a consequence of mother having made gifts to family members in the years prior to entering the nursing home.
By the time Medicaid started to pay, there was well over $100,000 in outstanding charges at the nursing home, and mother had no money to pay it. Mr. GoodSon is retired with only his house and barely adequate retirement savings. Nevertheless, the nursing home sued both mother and Mr. GoodSon. However, it is GoodSon who is at risk of losing everything — mother already is destitute.
To make matters worse, Mr. GoodSon did not seek my assistance until a few days before the court was to enter summary judgment — in other words, the nursing home was about to get a judgment against mother and Mr. GoodSon for the outstanding debt because Mr. GoodSon had been pursuing his legal defense without a lawyer.
We quickly ascertained that GoodSon had a number of defenses to the lawsuit, and we were able to defeat summary judgment notwithstanding the short time I had to do so. We next educated the lawyer for the nursing home about the reasons his client could not collect the entire outstanding balance from Mr. GoodSon. Indeed, Medicaid and nursing home collection law is highly complex. Having done so, we were able to persuade the nursing home to settle the matter for a fraction of the outstanding balance.
Fortunately for Mr. GoodSon, he sought out competent legal assistance not a moment too soon. Had he not done so, he could have suffered financial devastation.
While Mr. GoodSon and his mother are an extreme case, many people find themselves paying tens of thousands of dollars more than they have to by attempting to navigate the complex matter of paying for nursing home care without proper guidance.
Don’t let yourself fall into the trap that caught Mr. GoodSon — seek out competent counsel as soon as possible if you or a loved one will require nursing home care.
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