How Much House is Too Much?

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.


Preventing Medicaid Estate Recovery

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.

Maryland Updates Medicaid Transfer Penalty Rules

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. UPDATE: This divisor was again updated effective July 1, 2016.

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.

Bill Gatesman

Getting the MOLST Out of Medical Decision Making

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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Simplified Ancillary Administration in Maryland

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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Will Helping your Child Cause you to Lose Medicaid Benefits?

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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Solving a Thorny Property Ownership Problem

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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Ten Myths About the Dying Process

The following article, Bury the Top 10 Myths About the Dying Process, is by Tani Bahti, RN, CT, CHPN, Founder and Executive Director of Passages – Support & Education in End of Life Issues, and Author of “Dying to Know – Straight Talk About Death & Dying.”

The current debate about end of life decision-making in healthcare is avoiding the most important ingredient; understanding the natural process of dying. It is critical that this information be provided compassionately and thoroughly before those facing a potentially terminal illness can make a truly informed decision.

Those of us who work directly with the dying understand that the body has a natural wisdom built into it, to protect itself and promote comfort.

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Legislature Tinkers With Power of Attorney Law

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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