Free Trust Forms

A client recently asked me to review a trust form she was considering using, which was a form she obtained for free from the internet. Her objective was to set property aside in the trust so the assets would be protected and she could get Medicaid to pay her care costs should she ever require long term care in a nursing home.

I discourage people who are not lawyers from using legal documents that they obtain from the internet. Doing so could result in serious problems.

The trust my client obtained from the internet, dubbed a “Maryland Irrevocable Trust,” was defective in a number of ways. While some of the provisions of the trust would not necessarily be problematic, those same provisions could cause problems depending on the client’s objectives and the intended purpose of the trust. A lawyer who is skilled in the area of estate and trust law, and in this case, Medicaid law, is able to craft a trust that would meet the client’s objectives, and in doing so, would not include certain trust provision that might be acceptable in other circumstances.

For example, in my client’s case, the trust form contained a provision that instructed the Trustee to add any income that was not distributed to the beneficiary in a particular year to the principal of the trust. While this type of clause often is used by lawyers who prepare trusts, in light of my client’s objectives, such clause could be problematic. Every time income is not distributed in a particular year and added to the principal of the trust, such action will be treated as a gift for Medicaid eligibility purposes which causes a period of Medicaid ineligibility thereby defeating the purpose of the trust.

Another problem with the trust form my client wanted to use is that the trust did not give the trustee the authority to distribute principal to the beneficiary thereby locking the funds away so they would never be available to my client during her lifetime. Because my client was planning to put all of her assets into this trust, she may have found herself in dire straits were she to encounter a situation in which she needed to use more than just her income during her lifetime. While it is possible to create a trust that meets the client’s objectives without locking away the majority of the client’s assets, the trust form my client wanted to use was not sufficient for such purpose.

The trust form also prohibited beneficiaries from serving as trustees. However, my client wanted her children, who would be future beneficiaries, to serve as the trustees. Setting up the trust in that manner might put the trust at risk of being deemed not to be effective for my client’s intended purpose at some future time should she ever apply for Medicaid benefits expecting the trust to be in force to protect her assets.

In addition, while the trust stated that, after the client’s death, the trust assets would be distributed to her children, the trust was silent as to the disposition of the assets should one of her children die before she does. Would all of the property go to her surviving child? Or would her deceased child’s descendant take her deceased child’s share? This type of uncertainty could cause serious family problems in the future.

There were other problems with the trust form as well. One paragraph simply did not make sense. While I, as a lawyer, could come up with a reasonable interpretation of such language, it is possible that the paragraph could be misconstrued.

Also, the signature page of the trust had spaces for the creator of the trust to sign and spaces for each of the trustees to sign, but there was only one notary jurat, the space on the form in which the notary acknowledges that the person signed the document. It was unclear whose signature of the three persons who signed the document the Notary Public was to certify.

This case is but one example of several in which clients have come to me with legal documents they obtained from the internet, which documents were more of a problem than a solution to meet the client’s needs. Because of this, I warn clients to resist the siren’s song of free legal forms available on the internet. Often those forms create more problems than they solve.

The Gatesman Law Office offers economical solutions, including legal documents appropriate to the circumstances, to meet our client’s needs. Please contact us at 301-260-0095 to learn more.

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, Baltimore, Columbia, Frederick and Hagerstown, Maryland, and is available to make house calls as needed in those locations and in other areas of Maryland and the District of Columbia.

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


Scroll down to read articles Mr. Gatesman has written to educate consumers and their advocates regarding legal developments that may affect their lives.

Obtaining Medicaid with a Beach House

In general, for a married couple, if one of the couple needs long term care in a nursing home, the couple can engage in asset preservation planning that enables the couple to keep all of their assets and still get Medicaid to pay for the nursing home care. Included among the property that the couple can keep is the family home.

The matter can be complicated if, in addition to the family home, the couple owns a beach house. Specialized planning must be employed to protect the beach house.

For example, it may be possible to title the beach house in the name of the spouse at home, (not the nursing home spouse), and make it a rental property, if only temporarily. By doing so, the beach house can be characterized as a source of income for the spouse at home rather than being a countable resource which might cause Medicaid ineligibility. By doing so, the beach house would not be counted as an asset that would cause Medicaid ineligibility.

Another strategy can be employed where the beach house is owned with others. If a joint owner provides an affirmative declaration that he or she would refuse to participate in a sale of the property, then the property can be valued at zero for Medicaid eligibility purposes. Done properly, such strategy would pave the way to allow for Medicaid eligibility.

A third possibility is to list the property for sale. As long as the property is listed for an asking price that Medicaid will consider to be “fair market value,” if no offers to purchase are received, then the beach house can be valued at zero. For example, if the family owns a beach house that is in poor condition, and it is listed for sale at its assessed value, if no third party would be willing to pay that amount in light of the condition of the property, then this strategy may be employed to protect the beach house.

There are other strategies that may be employed, as well. The bottom line is this: don’t be dissuaded if you are faced with a challenging circumstance that complicates your Medicaid asset preservation plan. It still may be possible to engage in planning to preserve all of the family’s assets and get Medicaid to pay for care in the nursing home.

William M. Gatesman specializes in “thinking out of the box” to come up with creative solutions to assist clients with their asset preservation objectives.

Nursing Home Admissions Contract and Power of Attorney

Maryland nursing homes make use of two alternative model form nursing home admissions contracts approved by the Maryland Department of Health. These are the model Financial Agent’s Resident Agreement and the model Resident’s Agreement.

Maryland also has a power of attorney statute which includes form powers of attorney, among the provisions of which empower an agent under power of attorney to act for the principal to enter into contracts on behalf of the principal.

In light of the two factors addressed above, it is within the realm of possibility and legally permissible for an adult child of a person entering a nursing home who is acting as the agent under a power of attorney created by the parent entering the nursing home to execute a Resident’s agreement on behalf of the parent.

Nevertheless, when a parent enters a nursing home, the nursing home usually presents to such agent under a power of attorney the Financial Agent’s Resident Agreement to secure admission to the nursing home. Often this is done after the parent actually enters the nursing home.

William M. Gatesman strongly advises clients not to have their their agents under power of attorney sign the Financial Agent’s Resident Agreement, but rather, to sign, as agent under power of attorney, the Resident Agreement. Nevertheless, some nursing homes will refuse to provide such Resident Agreement to the agent to sign.

The problem with the Financial Agent’s Resident Agreement is that, technically, it is not legally the act of the agent under power of attorney binding the parent to a contract. Rather, it is a contract that binds the agent under power of attorney, typically an adult child of the person entering the nursing home, to a contract, making the agent legally and financially responsible to take certain actions not otherwise mandated by the agency relationship arising out of a power of attorney.

Indeed, the typical nursing home Financial Agent’s Resident Agreement contains a laundry list of matters for which the person signing the agreement binds themselves to the risk of suffering fines and civil money penalties of up to $10,000, and some of these provisions might be triggered when events occur that are not in the direct control of the agent signing the Financial Agent’s Resident Agreement.

Moreover, while the law offers opportunities for an agent under a power of attorney to facilitate and fulfill the estate plan of the person entering the nursing home by engaging in asset preservation planning strategies to facilitate Medicaid eligibility while still preserving assets, if an agent engages in such planning after signing a Financial Agent’s Resident Agreement, then such person will have made themselves subject to at least one of the circumstances that gives rise to such $10,000 penalties addressed in the foregoing paragraph, not to mention other potential personal liability.

In cases where the person entering the nursing home does not have a power of attorney, the Financial Agent’s Resident Agreement contains provisions that allow for an adult child of the person entering the nursing home to sign such agreement and to bind such child to the provisions of such agreement even if such adult child does not hold a power of attorney from the parent. The same issues addressed above pertain to any such adult child who signs a Financial Agent’s Resident Agreement.

William M. Gatesman urges any person involved in the admission of a parent or other loved one into a nursing home, if such person is asked to sign an admissions agreement with the nursing home on behalf of such person, to obtain competent legal advice before signing such agreement.

Indeed, Mr. Gatesman, has advised numerous clients not to sign the Financial Agent’s Resident Agreement, or to do so only after it has been modified by Mr. Gatesman to protect the person signing such contract.

William M. Gatesman stands ready to assist clients in the legal processes relating to nursing home admissions, including addressing the questions relating to which is the appropriate nursing home admissions contract to sign and how to protect the person signing such contract from the risk of personal liability.

Ageism and the Right to Drive

A client called me recently to report that the Maryland Department of Motor Vehicles had suspended his license for medical reasons. The MVA notice was deficient in that it did not give particular details as to the reason for the suspension.

Only later did we learn that a physician who my client had visited only once sent in a one line report stating that the client had dementia and memory issues and should not be allowed to drive.

We appealed the MVA license suspension and, in support of our appeal, we submitted letters from my client’s doctor who has a five year history with the client and a physchiatrist who has a 13 year history with the client, both of whom opined that the client, while he did experience mild dementia, was not so impaired as to be unable to drive safely.

We won that appeal and my client’s right to drive has been restored.

This case reveals that ageism may play a role in some doctors’ perceptions of an older person, and may color the doctor’s judgments about a patient’s abilities.

Fortunately, the law provides a remedy for persons whose right to drive is improperly denied due to the rash actions of those who do not take into account all of the factors impacting a patient’s ability to drive. In a word, the law enables older people to combat ageism.

William M. Gatesman assists seniors and their family members in addressing legal issues that impact them. If you encounter such a problem, you may call Mr. Gatesman at 301-260-0095 to learn whether there is a solution available to you.

Supported Decision Making

Supported Decision Making is a new concept gaining favor in the community of people working to better the lives of people with disabilities. There is no formal process or formal legal recognition of Supported Decision Making in Maryland and it is a developing area of law in only a few states and other jurisdictions. The District of Columbia, for example, does give some recognition to Supported Decision Making in its statutory law.

Supported Decision Making typically would involve a person with limited personal capacity agreeing and communicating to other parties that such person wishes to have another trusted individual involved with communications with third parties such as banks, medical care providers, and so on, and that such person wishes to obtain the trusted individual’s input and guidance. Nevertheless, the person with limited capacity retains the right to make all her decisions.

Supported Decision Making often is implemented by means of a Supported Decision Making agreement or other legal document memorializing the relationship between individuals that could be presented to third parties for the purpose of enabling the trusted person to be involved with communications between the third party and the person of limited capacity. Such document serves the purpose of notifying third parties of the trusted person’s advisory role and can be used to open doors to enable the trusted person to participate in conferences which usually are attended only by the person of limited capacity and the third party. In states such as Maryland in which Supported Decision Making is not formally recognized in the law, the efficacy of such Supported Decision Making document is hard to predict, and any use of such tool in Maryland would be based upon a contractual relationship between the parties rather than upon specific statutory law.

A power of attorney, unlike the supported decision making agreement, establishes a legal relationship recognized under state law in which the person of limited capacity empowers the trusted individual to act in her place, as her agent. An agent under power of attorney (i.e. the trusted person) always is subsidiary and subservient to the principal (the person with limited capacity). With a power of attorney, the agent typically would be able to act alone even if the principal is not present or not personally involved in the interactions with the third party. Power of Attorney has been recognized by the law for a very long time and there would be no question as to the validity of the relationship of the principal and the agent.

A Supported Decision Making arrangement may be beneficial in some circumstances to provide a person with limited capacity a greater sense of autonomy and control while still enabling the trusted individual to be involved with her affairs and it could open doors to allow the trusted individual to be involved in situations in which privacy laws or other restrictions otherwise may keep the trusted individual on the sidelines. The person with limited capacity may desire to appoint the trusted person as her agent under power of attorney, as well, so that if the person with limited capacity became unable to manage her affairs, then the trusted person would have the authority to act on her behalf.

William M. Gatesman stands ready to assist clients who may have heard about Supported Decision Making and would like to learn more about it or who think that Supported Decision Making is a tool they may wish to employ in their estate planning.

Degrees of Relationship

Have you ever referred to someone as being your “second cousin?” Would you be surprised if you may have gotten the relationship wrong? Posted below is the Nolan Chart of Relationships and Degrees of Kindred. This chart, while it is interesting from a familial relationship point of view, also provides legally significant information that is important in some instances when administering a decedent’s estate.

Saving a Charitable Bequest

A charitable organization approached me recently because a Maryland resident left a large bequest in her Will to the organization, but the language in the Will limited the gift to be used by a certain class of persons served by the charitable organization.

Unfortunately, over time, the organization that was to receive the bequest had discovered that there are so few of the types of people the bequest was intended to benefit that the organization had been directing its resources to assist others who suffered similar disabilities, just not the particular disability identified in the bequest under the Will.

Fortunately, Maryland law allows the recipient of such a bequest to obtain a Court Order expanding the scope of the Will so that the intended recipient of the bequest is able to use the gifted funds in furtherance of its charitable purposes.

William Gatesman was able to file a pleading with the Circuit Court and obtain a court order without the necessity of a court hearing, thereby enabling the charitable organization to make effective use of the bequest and fulfilling the deceased person’s charitable intentions.

The Gatesman Law Office stands ready to resolve problems that may arise in the administration of the estate of a deceased person in an efficient and economical manner.

Client Meetings and Social Distancing

In a time of crisis, people may wonder how they can address urgent legal needs with the least risk to themselves when governments are calling for avoiding large gatherings of people and other forms of “social distancing.”

For years, William M. Gatesman has given people the opportunity to engage in free initial consultations by means of telephone conferences and email exchanges. People have welcomed these methods, some because they are busy and appreciate the convenience of such meetings, others because they have found that some lawyers insist on high-cost meetings just to get the ball rolling, and still others for any number of other reasons.

In addition, William Gatesman has worked with clients by sending draft documents by mail or email, or both, and has addressed client questions and concerns by telephone and email. Video conference also may be used to facilitate the representation.

Often, Mr. Gatesman will wrap up the engagement with a single meeting with the client, once the preliminary matters have been addressed in the manner discussed in the paragraphs above, and sometimes, if necessary, there will be multiple additional meetings, but only if those are needed to meet the client’s needs. Some engagements, however, may be completed entirely through remote communications.

While some law firms now are struggling to try to figure out how to meet a client’s needs with less face to face interaction, the Gatesman law office has years of experience in meeting clients’ needs through various forms of communications, including face to face meetings, telephone and email consultations, and other means.

William M. Gatesman stands ready to assist you and your loved ones with your legal needs even where social distancing is the order of the day.

Please feel free to contact Mr. Gatesman by telephone at 301-260-0095, or by email at contact@gatesmanlaw.com

Making a Claim in a Decedent’s Estate

When making a claim in a decedent’s estate, may the claimant rely on information provided by the Register of Wills through it’s online website? Or is such reliance risky?

It is important that one who seeks to make a claim in a decedent’s estate do so within 6 months following the decedent’s death, and that the claimant follow all the rules for making such a claim. Unfortunately, there is a risk in relying on the information provided by the online estate docket for a particular estate published by the Registers of Wills in Maryland. A recent case handled by William M. Gatesman illustrates this point.

In that case, the State of Maryland filed a $120,000 claim in a decedent’s estate for Medicaid benefits paid by the State of Maryland for the nursing home costs of the decedent before she died. The rules of court governing such claims require that, if the claim is filed with the Register of Wills, it must also be sent to the Personal Representative of the estate.

In this particular case, however, the Personal Representative never received a copy of the claim, and so, she denied the claim. Maryland petitioned the probate court for allowance of the claim. During the court hearing, evidence was presented that the State of Maryland had relied on the Register of Wills web page which, at the time the claim was made, listed a particular post office box address as the address of the Personal Representative. However, that address was incorrect – apparently the Register of Wills clerk made a typographical error when entering the address on the online docket page.

The question boiled down to this: even though the State of Maryland as claimant did not send a copy of the claim to the Personal Representative at the Personal Representative’s actual address, could the claim nevertheless be valid under the rules governing claims in a decedent’s estate because Maryland sent a copy of the claim to the address of the Personal Representative shown on the Register of Wills web page pertaining to the particular estate? In other words, could the claimant rely on the information set forth on the online estate listing published by the Register of Wills?

The resolution of that question depended on a thorough analysis of the statute and rules applicable to claims in an estate, and to a review of case law regarding statutory requirements of delivery of claims in contexts other than decedent’s estates (there being no law directly on point with respect to such estates). At the probate court hearing, William M. Gatesman was prepared to present such an analysis.

In the end, the probate court ruled that Maryland failed to meet the requirement that it deliver a copy of the claim on the Personal Representative of the estate, and the Personal Representative’s denial of the $120,000 claim was upheld (i.e. Maryland was not allowed to collect on its claim).

What this story reveals is that there are technical requirements a claimant must meet in order for such claimant to collect funds owed to the claimant from a decedent’s estate, and that reliance on information published by the Register of Wills may lead to the claimant losing its opportunity to collect on its claim.

William M. Gatesman stands ready to assist clients, either as claimants in an estate, or as Personal Representatives seeking to defend an estate against claims that are not properly submitted.