Our New Look

On: By: Bill Gatesman

It has been awhile since I last wrote an article on the Maryland Elder Law website. I have been focusing my energy on revising the appearance of the site. My efforts are now complete with the addition of my photograph on the main page. While the old version of the website contained a photograph, I struggled to add the photo to the new version. I do all of my own website modifications, learning as I go. While I know a thing or two about estate planning, elder law, and photography, website development is a relatively new endeavor and I continue to learn as I go in the creation and revision of this and my affiliated websites.

One of the challenges of website development is designing a site that looks the same on each of the various web browsers in use today, Internet Explorer, Firefox, Opera, Safari, and others.  If you find that the website looks awry, please click the Contact Us link above and send me a message to let me know what looks funny about the site.

Now that the redevelopment process is complete, I am free to write more articles on legal topics of interest to our readers.

Stay Tuned.

Is It OK to Pay My Way?

On: By: Bill Gatesman

Mother has a stroke and moves in with you to live in the in-law suite in your home.  Mother pays you each month to cover her share of the utilities and to pay for the separate phone line installed in her room,  which line is included on your own personal telephone account.

Some time later, Mother needs long term care in a nursing home.  Unfortunately, she has only $1,000 in the bank and has been subsisting month to month on her income.  So you help your mother to apply for  Medicaid benefits to cover her nursing home costs.

The Medicaid caseworker accepts your application and does nothing for several months.  The nursing home, knowing that you have applied for Medicaid, requires that your mother only pay her income to the nursing home per month, which she must do in order to get Medicaid.  However, such payment is substantially less than the $8,500 per month the nursing would cost without Medicaid.

Five months after filing the Medicaid application, which is a typical application processing period, the caseworker informs you that mother’s contributions to the household expenses and the telephone bill will be treated as gifts to you, causing your mother to be ineligible for Medicaid.  In response, the nursing home sends you a bill for $40,000 for five months of care and will start billing $8,500 per month for future months.

“That’s outrageous,”  you exclaim, “my mother simply paid for the cost of heating and cooling her living space and for her private telephone line!  Those were not gifts to me!”

Outrageous as that may seem, it is true that the Medicaid rules penalize that type of cost sharing unless it is supported by a contract between you and your mother.

For this reason, any time a senior family member is contemplating entering into a financial transaction or co-living arrangement with another family member, it is wise to seek competent legal counsel.   Indeed, seemingly commonsense actions could have far reaching adverse consequences if nursing home care ever becomes a necessity.

The Gatesman Law Office stands ready to assist your family in doing appropriate planning to ensure that such surprises do not occur in your life or the lives of your parents.

More Than One Way to Skin a Cat

On: By: Bill Gatesman

You’ve heard the old saw: “There is more than one way to skin a cat.” Such folk wisdom can inspire estate planners to dream up creative solutions to thorny legal problems.

Recently, the Gatesman Law Office had been assisting a family in revising the distribution pattern under their estate plan. Husband and wife each had a revocable trust, which trusts held property in further trust for one of their children after both husband and wife died. The share for their other child was to be given to him outright, free of trust.

However, as time passed, the conditions that prompted the desire to hold property in trust for the couple’s now adult child no longer existed and they were in the process of revising their revocable trusts to eliminate the trust for such adult child.

Then, suddenly and unexpectedly, husband died. As a consequence, husband could no longer amend his revocable trust. While wife, who survived her husband, was now the trustee and beneficiary of husband’s trust, she did not have the power to amend the trust to change how trust assets would be distributed after her death.

Continue reading “More Than One Way to Skin a Cat” →

The Secret Handshake – Paying for Long Term Care in a Nursing Home

On: By: Bill Gatesman

The “Secret Handshake” refers to that gesture known only by the select few who are allowed access to an exclusive club.  I use that as the title to this post because the State of Maryland has adopted policies that make it hard for people who do not have “inside information” to make good informed decisions regarding their financial planning should nursing home care loom on the horizon.

Continue reading “The Secret Handshake – Paying for Long Term Care in a Nursing Home” →

Estate Plan Checkup

On: By: Bill Gatesman

For our younger readers, this time of year is heralded by the hustle-bustle of back to school activities.  It is the time for parents of young children to double check that the kids have shoes that fit for gym class, warm clothes for the winter months, and pens, pencils, and rulers to stock the kids’ backpacks for the first day of school.

For all adults, now is a good time to review your estate plan to make sure that your plan is in order to meet your changing needs.  Have you executed a Power of Attorney to ensure that a trusted agent can manage your financial affairs should you become incapacitated?  Do you have an advance health care directive to ensure that appropriate medical choices are made even if you cannot communicate those choices to your health care providers?

Are the individuals you have chosen to serve as your agents in those documents still the best choices, or have your or their circumstances changed significantly so that choosing other agents is appropriate?

Do you have a Will?  Does your will impose limits because your children were minors when you wrote it, limits that are no longer appropriate?

By asking yourself these and other questions, you will discover whether it is time to review your estate plan with your legal counsel.  This type of periodic review of your estate plan will ensure that your plan continues to meet your needs even as your needs change over the years.

Happy autumn from the Gatesman Law Office.

Medicaid Transfer Penalty

On: By: Bill Gatesman

In Maryland, one is ineligible to receive Medical Assistance, or Medicaid, for long term care in a nursing home if one gives property away, or transfers property for less than full value.  Since 2006, this period of ineligibility does not begin to run until the gift giver resides in a nursing home and is out of money.

The period of ineligibility is determined by dividing the amount of the gift (or the aggregate amount of all gifts) by the penalty divisor.  The penalty divisor has been $4,300 for many years.  For Medicaid applications filed on or after June 1, 2009, the penalty divisor will be $6,800.  Using the new divisor, a gift of $68,000 will cause a Medicaid ineligibility period of 10 months, six months less than the penalty that would have been imposed using the old divisor.

Please contact the Gatesman Law Office to learn more about how this change may affect you.

Legal Research in Maryland

On: By: Bill Gatesman

I stumbled upon a blog written by Trevor Rosen that provides invaluable information for people seeking to do legal research in Maryland.   For example, his May 2, 2009, blog post gives guidance on how to obtain legislative history for Maryland statutes.  Lawyers use legislative history to ascertain the lawmakers’ intentions when passing legislation.  Legislative history is important if a law is not clear, or if the meaning of the law is in dispute and the matter must be decided by a court.  When courts interpret statutory law they frequently refer to the legislative history.

Rosen provides many other resources to assist lawyers and others who seek to research Maryland law.  I have placed a link to Trevor Rosen’s blog in the Web Links section of this webpage.  To see Rosen’s blog, click on the words “Researching Maryland Law” in our Web Links.

Personal Injury Trusts

On: By: Bill Gatesman

The Gatesman Law Office works with personal injury lawyers to assist their clients in protecting the assets they recover for their clients. Sometimes, it is prudent to utilize a special trust to protect any public benefits the injured party may be getting. If, for example, the client is eligible for Supplemental Security Income (SSI) and Medicaid, using such a trust is essential. Without the trust, the client will lose both SSI and Medicaid.

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Have Your Cake and Eat It Too

On: By: Bill Gatesman

Traditional Medicaid Asset Preservation Planning enables the well spouse to protect some or all of the assets while allowing the spouse in the nursing home to obtain Medical Assistance to pay the cost of nursing home care.  Post-Medicaid eligibility planning techniques enable the well spouse, should she predecease the spouse in the nursing home, to pass all of the assets to children without having to pay back any of the nursing home costs.

This type of traditional Medicaid planning, however, does nothing to preserve assets for the well spouse should the well spouse also require long term care in a nursing home sometime in the future.  Indeed, many of the powerful asset preservation tools available to a married couple cannot be used to preserve assets for a single person seeking Medical Assistance benefits to cover nursing home costs.

Consequently, even where a couple has done asset protection planning when one of them enters a nursing home, after that individual has died, the well spouse remains at risk to lose all of her assets in the event she should require long term nursing home care.

William M. Gatesman has been a leader in developing asset preservation techniques for individuals and families facing the possibility of high long term care costs.  Mr. Gatesman’s latest development in long term care asset preservation strategies is the Spousal Asset Preservation Trust.

Continue reading “Have Your Cake and Eat It Too” →