When people think about using Medicaid to pay for nursing home care, they generally think that the program will pay only after most of their assets are gone. However, there are little known rules that allow people to keep certain substantial assets and still get Medicaid for nursing home care. Some of these rules apply only if there is a spouse living at home, and others apply even if a single person is seeking Medicaid benefits.
This office has recommended, and most estate planners will agree, that one should consider appointing a trusted individual to make health care decisions for you in the event you are unable to do so. I wrote a comprehensive article on that topic on October 7, 2007.
Maryland law not only allows one to appoint a Health Care Agent, the statute provides forms one may use to do so. While I have always recommended that one seek experienced legal counsel when appointing a Health Care Agent – one of the statutory forms curiously omits a significant provision – such advice is even more compelling in light of a new ruling by Maryland’s Attorney General.
Much of elder law practice revolves around dollars and cents, dealing, for example, with questions of how to save the house to pass onto future generations, how to find alternative sources of payment for nursing home care, or how to avoid estate taxes, to name but a few. However, elder law practice involves much more than that.
In my elder law practice, I counsel clients dealing with significant life changing circumstances. While it is clear that people suffer grief when their spouse, parent, or other loved one dies, it may not occur to some that other events likewise will trigger the grief cycle.
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Some families make large gifts to family members — to enable a child to purchase a house, for example, or to assist a grandchild by paying college expenses. Others make the conscious choice to make a large gift of assets to their children to ensure that those funds will stand in the place of an inheritance should the parents ever require long term care in a nursing home. Without such large gift, those funds might otherwise be depleted by high nursing home costs.
Considering Future Medicaid Eligibility
When making such gifts, seniors must pay close attention to the affect such gifts would have on their ability to obtain government benefits to pay for future nursing home care. As long as sufficient time passes from the time of the gift and an application for Medicaid benefits, those assets will be protected and the gift-giver’s children will not be required to pay back the gift to cover the gift-giver’s care costs.
We have added a page to our website to provide our clients with forms they may need to facilitate our representation. You may access that page by clicking on the word “Forms” in the menu at the top of this page.
One of the documents in the Forms directory is a Memorandum listing the items one needs to provide to us to support a Medicaid application .
Battley v. Banks (Md. App. December 20, 2007)
The Gatesman Law Office assists clients in the appointment of a guardian for persons who become incapacitated and cannot make personal or financial decisions for themselves. Guardians are entitled to be compensated for their services, but they must petition the guardianship court for approval of such compensation.
When the disabled person, called the “ward” of the court, dies, the guardian must prepare a final account of the ward’s assets. That account should include the guardian’s final request for compensation.
Whether the guardian may pay such compensation to himself out of the guardianship assets before the ward’s assets are turned over the personal representative of the ward’s probate estate depended on the county in which the ward resided. The courts in different counties applied different rules.
Now, however, the rule is clear. Continue reading “Can a guardian be paid for services after the ward has died?”
Schoukroun v. Karsenty (Md. App. December 11, 2007). A Technical Article for Maryland Elder Law and Estate Planning Attorneys
The Maryland Court of Special Appeals, in a seismic shift to the estates and trusts law of Maryland, issued an opinion on December 11, 2007, imposing augmented estate rules on the State of Maryland. This decision has significant consequences affecting Medicaid asset preservation planners, estate planners, family law practitioners and CPAs.
Prior to this decision, the Maryland legislature, despite years long advocacy by some members of the Estates and Trusts section of the Maryland State Bar Association, refused to add augmented estate rules to the estates and trusts law of Maryland.
Many seniors have heard that giving assets to one’s children is a way to safeguard those assets so that they will pass on to the younger generation upon the senior’s death even if nursing home care is required. However, the law governing Medicaid has changed and it now appears that Medicaid will not be available to those who make such gifts.
Nevertheless, while the strategy of making gifts to children in anticipation of requiring nursing home care is much more complex under the new law, it still may be possible for you to preserve assets in this manner.
A technical notice for Maryland elder law professionals.
When a homeowner executes a deed retaining for himself a life estate, such action will be considered a transfer of resources for Medicaid eligibility purposes. However, the homeowner has not given away the entire property. What the homeowner has given away is a remainder interest, that is, the right to own the property after the homeowner dies.
The value of the transferred remainder interest depends on the age of the homeowner who retains the life estate. Maryland uses a table, Schedule MA-7, to assign value both to the transferred remainder interest and to the retained life estate. You may view that table by clicking here: Life Estate and Remainder Interest Table.