Probate is the legal process by which a deceased person’s assets and property are distributed to their heirs or beneficiaries under the supervision of a court. In Maryland, probate is a court-supervised process that ensures that the deceased person’s assets are distributed in accordance with their wishes or Maryland law, if there is no valid will.
During probate, the court oversees the administration of the deceased person’s estate, including the identification and valuation of assets, the payment of outstanding debts and taxes, and the distribution of property to heirs or beneficiaries. The process can be complex and time-consuming, and it can involve multiple court appearances and legal fees.
In Maryland, the probate process begins by filing a petition for administration with the Register of Wills in the county where the deceased person lived. The petition should include information about the deceased person’s assets, property, debts, and potential heirs or beneficiaries. The court will then appoint an executor or personal representative to oversee the probate process and ensure that the deceased person’s wishes or Maryland law is followed.
It is important to note that not all assets are subject to probate, and some may pass directly to beneficiaries or heirs outside of the probate process. It is recommended to consult with a qualified attorney to understand the Maryland probate process and the options available for estate planning and asset distribution.
Click here to visit RELEP’s Estate Planning and Probate webpage.
Frequently Asked Questions
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What is Probate?
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What is Maryland’s LTC Medicaid Asset Threshold?
In Maryland, the asset limit for long-term care Medicaid is $2,500 for an individual, and $3,000 for a married couple, as of 2023. This means that an individual or couple must have no more than this amount of assets in order to be eligible for long-term care Medicaid.
It is important to note that not all assets are counted towards the asset limit for Medicaid. Certain assets, such as a primary residence, personal belongings, and a single vehicle, may be exempt from the asset test. However, other assets, such as bank accounts, stocks, bonds, and second homes, are typically counted towards the asset limit.
In addition to the asset limit, Maryland also has a “lookback” period of five years, during which the state reviews an individual’s financial records to determine if any assets were transferred or given away for less than fair market value. If the state determines that any such transfers occurred during the lookback period, they may impose a penalty period during which the individual will be ineligible for Medicaid benefits.
It is important to note that the rules and requirements for long-term care Medicaid in Maryland can be complex, and may vary depending on the individual’s circumstances and the specific Medicaid eligibility category. It is recommended to consult with a qualified attorney or Medicaid specialist to determine your eligibility and navigate the Medicaid application process.
Click here to visit RELEP’s Elder Law and Medicaid webpage. -
What does a Health Care Power of Attorney do?
A healthcare power of attorney is a legal document that designates a person (the agent or attorney-in-fact) to make healthcare decisions on behalf of another person (the principal) in the event that the principal becomes incapacitated or unable to make their own healthcare decisions.
A healthcare power of attorney grants the agent the authority to make decisions related to the principal’s medical treatment, such as:
Deciding whether to withhold or withdraw life-sustaining treatment
Choosing healthcare providers and facilities
Approving or denying medical tests or procedures
Deciding on the use of pain management
The agent is responsible for making healthcare decisions in accordance with the principal’s wishes, as expressed in the healthcare power of attorney document or in other advance directives for healthcare.
The healthcare power of attorney is an important estate planning document that can help ensure that a person’s healthcare wishes are respected and carried out in the event that they become incapacitated. It is important to choose an agent who understands the principal’s wishes and is capable of making difficult medical decisions. It is also important to review and update the healthcare power of attorney regularly to ensure that it reflects any changes in the principal’s circumstances or wishes.
Click here to go to RELEP’s Estate Planning webpage. -
Does Maryland have an Inheritance Tax?
Maryland’s collateral inheritance tax is a tax on the transfer of property or assets from a deceased person’s estate to non-lineal heirs or beneficiaries, such as cousins, nieces, nephews, or unrelated individuals. Maryland does not have an inheritance tax on direct lineal descendants (i.e., grandparents, parents, children, grandchildren, and siblings). Maryland does have a collateral inheritance tax on non-lineal descendants.
The collateral inheritance tax rates in Maryland vary depending on the value of the property or assets received which is usually assessed around 10% – 11.1111% depending on the specific circumstances of the matter. The tax is calculated based on the fair market value of the property at the time of the deceased person’s death, and is paid by the recipient of the property or assets.
It is important to note that there are certain exemptions and deductions that may apply to the collateral inheritance tax in Maryland, such as exemptions for property transferred to charitable organizations, or deductions for debts and expenses related to the transfer of the property.
It is recommended to consult with a qualified attorney or tax professional to understand the Maryland collateral inheritance tax and the options available for estate planning and asset distribution.
Click here to visit RELEP’s Estate Planning and Probate webpage. -
What is a Letter of Administration?
A letter of administration is a legal document issued by a court that gives a person or persons the authority to manage the estate of a deceased person who did not leave a valid will or did not appoint an executor. The person who is appointed by the court to manage the estate is known as the administrator.
The letter of administration gives the administrator the power to act on behalf of the deceased person’s estate, including:
Collecting and managing the deceased person’s assets.
Paying debts and taxes owed by the deceased person and the estate.
Distributing the remaining assets to the rightful beneficiaries according to the laws of the state.
In Maryland, if a person dies without a valid will or an appointed executor, the court will appoint an administrator to manage the estate. The administrator will need to obtain a letter of administration from the court before they can begin managing the estate.
To obtain a letter of administration, the administrator will need to file a petition with the probate court, provide proof of the deceased person’s death, and provide information about the deceased person’s heirs and assets. The court will then review the petition and issue the letter of administration if it is satisfied that the administrator is qualified to manage the estate. -
What is Long-Term Care Medicaid?
Long-term care Medicaid is a joint federal and state program that provides medical and long-term care coverage for eligible low-income individuals who meet certain medical and financial criteria. The program is known as Medicaid in the United States, and it is administered by individual states.
Long-term care Medicaid is designed to help people who require long-term care services, such as nursing home care, home health care, and other types of care that are not covered by Medicare. Medicaid may also cover other types of medical services, such as doctor’s visits, hospital care, prescription drugs, and medical equipment.
To be eligible for long-term care Medicaid, an individual must meet certain income and asset requirements, as well as medical criteria that demonstrate a need for long-term care services. The exact eligibility requirements may vary by state, but in general, the program is intended for low-income individuals who require extensive long-term care services.
It is important to note that long-term care Medicaid is different from Medicare, which is a federal program that provides health insurance coverage for people who are 65 or older, or who have certain disabilities. While Medicare may cover some types of medical services, it does not typically cover long-term care services in the same way that Medicaid does.
Click here to visit RELEP’s Elder Law and Medicaid webpage. -
What is a Special Needs Trust (a.k.a. Supplemental Needs Trust)
A special needs trust is a legal instrument that is designed to provide for the care and financial support of a person with disabilities, while also protecting their eligibility for certain government benefits, such as Medicaid and Supplemental Security Income (SSI).
The purpose of a special needs trust is to allow a person with disabilities to receive financial assistance without disqualifying them from government benefits that are means-tested, which means they are based on the individual’s income and assets. By placing funds in a special needs trust, the beneficiary can receive support and care that supplements, rather than supplants or replaces, their government benefits.
A special needs trust can be created by an individual for their own benefit, or it can be established by a family member or guardian on behalf of the person with disabilities. There are several types of special needs trusts, including first-party trusts (funded with the beneficiary’s own assets), third-party trusts (funded with assets belonging to someone else), and pooled trusts (established and managed by a nonprofit organization).
Special needs trusts are subject to strict rules and guidelines, and it is recommended to consult with a qualified attorney who is knowledgeable in this area to ensure that the trust is properly established and managed to achieve the intended goals.
Click here to visit RELEP’s Special Needs Planning webpage. -
What is the Medicaid Look-Back Period?
In Maryland, the Medicaid lookback period is currently five years. This means that when an individual applies for Medicaid benefits to pay for long-term care, the state will review the individual’s financial records for the five-year period prior to the application date to determine if any assets were transferred or given away during that time.
If the state determines that the individual has transferred assets for less than fair market value during the lookback period, they may impose a penalty period during which the individual will be ineligible for Medicaid benefits. The length of the penalty period is based on the amount of the transfer and the average monthly cost of long-term care in the state.
It is important to note that the lookback period and rules regarding transfers of assets can vary by state, so it is important to consult with a qualified attorney who is familiar with Medicaid rules and regulations in Maryland to ensure that you are making informed decisions regarding your assets and Medicaid eligibility.
Click here to visit RELEP’s Elder Law and Medicaid webpage.
