Does everybody need a revocable trust?

On: By: Bill Gatesman

Many of you have heard the clarion call – “You need a revocable trust!” This cry emanates from the full page newspaper ads touting the one-day seminars on revocable trusts. This cry emanates from the 60-second spots on the radio informing you that your estate plan is not complete without a living trust. Such marketing tactics might lead one to believe that everyone should use a revocable trust. But is it a good idea for you?

While revocable trusts can be good estate planning tools, they are not for everyone. Any advertisement that implies this is misleading. Indeed, by using a revocable trust, seniors can lock themselves out of a powerful asset preservation strategy. Before reviewing that strategy, however, lets take a closer look at revocable trusts.

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Using Fiction to Obtain Medicaid Eligibility

On: By: Bill Gatesman

A technical article for Maryland elder law professionals.

Another lawyer called recently and asked me how to resolve a problem faced by one of his clients. When I told him what to do, he remarked: “You’re making that up!” He was right about my “making that up” because my solution involved employing a fiction to obtain the desired result.

There are two ways an asset preservation planner may use fiction to help a client to qualify for Medicaid benefits. The first is getting a court order nunc pro tunc, and the second is to use a special power of attorney.

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Gifts by Spouse Cause Medicaid Ineligibility

On: By: Bill Gatesman

A technical notice for consumers and Maryland elder law professionals.

In a dramatic shift in Medicaid policy, Maryland now will look at asset transfers by a spouse living in the community to determine whether the spouse in the nursing home may continue to receive Medicaid benefits. Previously, once Medicaid eligibility was granted, the community spouse could make gifts of assets or create a life estate deed with no adverse consequence to the spouse in the nursing home. Now, however, the Maryland Medicaid authorities state that such actions by the community spouse will cause the spouse in the nursing home to lose Medicaid benefits. Click the Contact Us link at the top of the page if you would like to learn more about this recent development in the law.

Intense Scrutiny for Third Party Trusts

On: By: Bill Gatesman

A technical article for Maryland elder law professionals.

Elder law lawyers are familiar with third party trusts authorized by the Omnibus Budget Reconciliation Act of 1993 (OBRA ’93), which third party trusts are addressed in 42 U.S.C. 1396p(c)(2)(B). With such a trust an individual can set aside assets for a disabled person under age 65 and not cause such disabled beneficiary to lose Supplemental Security Income (SSI) or Medicaid benefits. Moreover, the person who creates and funds the trust will not become ineligible to receive such benefits as a consequence of funding the trust.

The Gatesman Law Office now is negotiating with the Maryland Medicaid authority over Maryland’s imposition of strict requirements not found in the law allowing the use of such trusts. In particular, for a so-called c2B trust, Maryland will require the following:

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Power of Attorney and Advance Directive

On: By: Bill Gatesman

Like the shoemaker whose children run around barefoot, there are lawyers who have no estate plan. Even more numerous are non-lawyers who have never done any estate planning. Some folks might reason that such planning is unnecessary because they don’t have vast wealth or that all of their wealth is tied up in retirement assets that will pass to their named beneficiaries. While it is true that such people may not require sophisticated estate planning, all adults would be prudent to ensure that appropriate personal and financial decisions will be made for them should they lose the ability to make such decisions themselves. There are several basic estate planning documents that enable people to appoint trusted individuals to make such decisions on their behalf.

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Maryland Changes its Medicaid Rules

On: By: Bill Gatesman

Maryland has issued new regulations making significant changes to Medicaid law. These changes affect many individuals who have done Medicaid planning in the past. This article will discuss the changes and show how they might affect you. Because these new rules drastically alter the assumptions that underlay all previously considered plans, prudence suggests that all existing asset preservation plans be reconsidered. These new regulations deal with Federal rule changes and many of the points discussed below will apply in D.C. and other States as well. This office has been working to develop strategies to address these new rules. Continue reading “Maryland Changes its Medicaid Rules” →