Gifts to Disabled Children

Medicaid law allows a parent to gift any amount of assets to a disabled son or daughter and still get Medicaid to cover the parent’s long term care in a nursing home. If the child who receives the gift is not disabled as determined by the Social Security Administration, however, then any such gift, if made within five years preceding the date of the Medicaid application, will cause Medicaid ineligibility for the parent who made such gift.

The Medicaid rules state that both outright gifts to a disabled child, and gifts to a trust for the sole benefit of a disabled child are exempt transfers — that is, transfers that do not cause Medicaid ineligibility for the parent who makes the gift.

Continue reading “Gifts to Disabled Children”

The Other Side of Caregiving

Several months ago, I shared with you Carol Allen’s Reflections of a Non-Expert Care Giver in which Carol discussed how the experience of caring for her mother, who suffered from dementia, enabled Carol to shift her attention from the outer expression of life to its inner reality. For Carol, this was a positive, life affirming experience.

For others, such experience is a struggle of monumental proportions. Such is the case for Sandra Tsing Loh who relates her experiences managing her aging father’s care in the article/book review entitled Daddy Issues in the March, 2012, issue of the Atlantic magazine.

Continue reading “The Other Side of Caregiving”

Do I need a Lawyer to Apply for Medicaid?

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.

Medicare Open Enrollment Ends Early This Year

The Medicare open enrollment period ends this year earlier than prior year open enrollment periods, December 7 instead of December 31.

The open enrollment period to make changes to your Medicare coverage, or to add coverage such as Medicare Part D drug coverage ends December 7, 2011. Now is the time to act if you desire to make changes to your coverage.

To learn more, you may log onto the online Medicare Open Enrollment Center by clicking -Here-

Reflections of a Non-Expert Caregiver

Carol Allen cared for her mother, who had Alzheimer’s disease, for more than five years. Carol has spoken and written articles about her experience. Rather than “losing someone to Alzheimer’s,” Carol has been able to celebrate life through the process of caring for her mother.

Carol writes: “You hear of people ‘losing someone they love to Alzheimer’s’. And certainly they are going, going, going, never to return. But it gives us, the caregivers, the time needed to shift our attention from the outer expression of life to its inner reality. . . . There is a whole human being in front of us still desiring the same thing we all desire: to be loved for who we are right now. This is a wonderful opportunity to pour out our love and express it in ways that we never expressed it before.”

To read all of Carol’s Reflections of a Non-Expert Caregiver, click here.

Legislature Tinkers With Power of Attorney Form

As noted in other articles I have written, Maryland changed its Power of Attorney law effective October, 2010. If an individual uses one of the form Powers of Attorney in the statute, or a power of attorney that is in substantially the same form, and a bank refuses to accept it, then the individual can have the refusing party pay her legal fees if she goes to court to force that party to accept the Power of Attorney.

Because the form documents are not sufficiently comprehensive, lawyers, including William M. Gatesman and Michael G. Day & Associates, with whom Mr. Gatesman is associated, have created Powers of Attorney that are sufficiently comprehensive and which also are “substantially in the same form” as the statutory document. These Powers of Attorney are designed to be comprehensive enough to meet the client’s needs and to also qualify for the attorney’s fees remedy provided for in the new law.

Perhaps to keep everyone on their toes, but in fact to remedy a significant omission in the statutory form, Maryland’s legislature has amended the new Power of Attorney law in recent months. This amendment changes the “Banks and other financial institutions” section of the Personal Financial Power of Attorney form in the statute, which now reads, in pertinent part, as follows:

Banks and other financial institutions – With respect to this subject, I authorize my agent to: continue, modify, transact all business in connection with, and terminate an account or other banking arrangement made by or on behalf of the principal; establish, modify, transact all business in connection with, and terminate an account or other banking arrangement . . . .

Therefore, in order to have a Power of Attorney for which one may rely on the legal fees remedy in the statute after the effective date of the recent amendment, the Power of Attorney should have the language quoted above in the “Banks and other financial institutions” section of the Power of Attorney.

Please contact us for a complimentary review of your existing Power of Attorney.

May a Personal Representative Represent an Estate in Court Without a Lawyer?

Several lawyers have been pondering whether it is illegal for a Personal Representative to bring a legal action without a lawyer because doing so would be considered the unauthorized practice of law.

This office was involved in a case a few years ago in which the Maryland Court of Special Appeals ruled that a Personal Representative (who was not also an estate beneficiary) may not pursue a legal action in Circuit Court without a lawyer. The Appellate Court ruled that doing so constitutes the unauthorized practice of law. The Court ruled also that an estate is not a person who can pursue a legal action “pro se”.

When an individual goes to court without a lawyer, such person is said to be acting “pro se”. Only individuals are allowed to pursue legal actions in court on a pro se basis. Parties who are not individuals, such as corporations, may not do this, but rather, must be represented by a lawyer.

According to the Court of Special Appeals in this unpublished opinion, an estate likewise must have a lawyer to pursue a legal action in Circuit Court.

You may click here to read the case.

Medicaid Waiver and the Young

Some people require skilled care services even at a young age. For example, some people in their early 50’s with advanced Parkinson’s Disease or Multiple Sclerosis find that the only way to afford needed services is to reside in a nursing home where Medical Assistance will cover the costs of care.

Unfortunately, while such people need intensive physical care, they often do not suffer from dementia and are decades younger than most other nursing home residents. Consequently, a nursing home would not to be the most appropriate care environment from a socialization point of view.

The good news is that in Maryland and other states, the Medicaid program sometimes will waive the requirement that one reside in a nursing home to obtain Medicaid benefits for long term care costs. These programs are known as Medicaid Waiver programs. However, there is a vast waiting list for the Medicaid Waiver program in Maryland, and it can take three or four years before one’s name rises to the top of the list.

Fortunately, there is a shortcut to the top of the Medicaid waiver waiting list. If an individual is receiving long term care in a nursing home and applies for and is awarded Medicaid, for which there is no waiting list, then, once Medicaid is established, such person could transfer to assisted living, or even return home and receive home care, and have the Medicaid dollars follow him out.

In other words, the Medicaid eligible nursing home resident can move to another care environment and immediately qualify for the Medicaid Waiver program, bypassing the waiting list altogether.

Thus, relatively young people who suffer from advanced debilitating disease may be able to obtain Medicaid dollars to cover the care costs in an appropriate care setting. However, such person may first have to undergo a less appropriate nursing home stay in order to secure such benefits.

The Gatesman Law Office assists clients in obtaining public benefits to cover essential and prohibitively expensive health care coverage which otherwise would be unavailable.

Unorthodox Asset Preservation Strategy

Mother, who received Medicaid for day care during her lifetime, died. While her will states that the house should remain available for any child of hers who cannot afford a place to live, the creditors in a probate estate take priority. The Maryland Medicaid program was the sole creditor, filing a claim in the estate for $65,000 to cover the Medicaid benefits paid for mother’s benefit during her lifetime. Hence, the Medicaid claim took precedence over retaining the house for any of mother’s heirs.

Nevertheless, the personal representative of the estate did not want to pay the claim because one of mother’s daughters, who is not disabled, but is an underemployed single mother making $5,000 per year, cannot afford another place to live. So the personal representative of the estate denied the claim, and Medicaid filed a petition in the Orphan’s Court to have the claim allowed.

Maryland regulations allow the state, in its discretion, to elect not to pursue a claim in cases where a dependent child of a Medicaid recipient is living in the home. However, the state is required to forego the claim only if such child is disabled, and such was not the case in this instance.

Based on the facts, it appeared that the claim would be affirmed. Nevertheless, William M. Gatesman persuaded the Orphan’s Court that the Medicaid department should have given the personal representative an opportunity to appeal. Because it had not, the court reviewed the statutory criteria upon which the state could have forgiven the repayment obligation and concluded that the circumstances warrant letting mother’s adult child live in the house. On that basis, the Orphan’s Court denied the claim.

While the state could have appealed the Orphan’s Court decision and might have argued that no such appeal right existed, it did not do so. Consequently, we were successful in eliminating the $65,000 payment obligation for mother’s estate.

While it is more typical for lawyers to assist clients in asset preservation strategies before death, this case illustrates an unusual circumstance in which intervention by legal counsel resulted in a substantial savings to the client when, at first blush, all appeared lost.

Probate to Remove a Cloud on Title

William M. Gatesman and the Michael G. Day Law Office recently assisted a client in the following situation. During her husband’s lifetime, the client and her husband transferred their real estate to various trusts using deeds that identified the trust as the recipient or grantee of the property, specifically using the name of the trust without including the name of the trustee.

Deed to Trust Must Name Trustee
Under current Maryland law, such a deed would be effective to convey the property to the trust. However, at the time the deed was signed, Maryland law required that the trustee of the trust (i.e. an actual person) be listed as the grantee in order for the deed to be effective. Listing the trust itself as grantee without also listing the trustee by name was ineffectual. Consequently the client’s deeds were not effective and there was a “cloud on title”, meaning that the property could not be sold until the problem was resolved.

In this case, because the original deeds to the trusts were not effective, we needed husband and wife to sign confirmatory deeds that included the name of the trustee as grantee. However, because husband had died, he could no longer sign a confirmatory deed. And even though his wife held his power of attorney, a power of attorney is no longer effective when the principal dies.

Ancillary Probate
To complicate matters further, while the real property is located in Maryland, the couple had since moved to another state. Since all of their other property had effectively been conveyed to the trusts, no probate proceeding was necessary in such other state even though their wills were on file with the court in that state.

Typically, in cases were an individual is domiciled in another state and dies owning real property in Maryland, one first opens an estate in the state of residence and then undertakes a streamlined “ancillary administration” in the Maryland probate court.

No Clear Procedure
While our office resolved this matter some time ago, it is evident from inquiries by other probate lawyers in an email discussion forum that some lawyers wonder whether a Maryland probate can be opened to address such an issue if there is no probate in the state of domicile.

In fact, Maryland’s rules of procedure and the statutes addressing the jurisdiction of Maryland’s probate court do allow a family member to open a probate estate in Maryland in such circumstance. On that basis, we were able to have a Personal Representative appointed in Maryland for husband’s estate for the sole purpose of executing the confirmatory deed which wife also signed. In this way, we were able to remove the cloud on title that affected the marketability of the properties.

This is one example of the type of complex situation we are called upon to resolve on behalf of our clients on a day to day basis.