FAQs Archive - Ritter Elder Law & Estate Planning

Frequently Asked Questions

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  • What is Estate Planning?

    Estate planning is the process of preparing for the management and distribution of a person’s assets and property after they die, as well as planning for the possibility of incapacity or disability during their lifetime. The primary goal of estate planning is to ensure that a person’s assets and property are distributed according to their wishes, and to minimize the tax implications of those distributions.

    Estate planning typically involves creating a comprehensive estate plan that includes a variety of legal documents, such as a Last Will and Testament, a trust, powers of attorney, and advance directives for healthcare. These documents help to ensure that a person’s wishes are carried out, even if they become incapacitated or unable to make decisions on their own.

    Estate planning also involves taking steps to minimize the tax consequences of the transfer of assets and property. This can include strategies such as gifting assets during a person’s lifetime, establishing trusts, and taking advantage of tax exemptions and deductions.

    In addition to the legal documents and tax planning strategies, estate planning also involves reviewing and updating the estate plan regularly to ensure that it reflects any changes in a person’s circumstances, such as the birth of a child, a change in marital status, or the acquisition of new assets or property.

    Overall, estate planning is an important process that can provide peace of mind and ensure that a person’s final wishes are respected and carried out in a legally binding manner. It is recommended to work with a qualified estate planning attorney to create an estate plan that is tailored to your specific needs and circumstances.

    Click here to visit RELEP’s Estate Planning webpage.

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  • What is a Tenancy by the Entirety?

    In Maryland, a tenancy by the entirety is a type of joint ownership arrangement between spouses that provides additional legal protection to their shared property. It is only available to married couples and is similar to joint tenancy, but with some important differences.

    Under a tenancy by the entirety, the property is owned equally by both spouses, and neither spouse can sell, transfer, or encumber their interest in the property without the other spouse’s consent. This means that if one spouse incurs a debt or a legal judgment against them, the creditor cannot force the sale of the property to satisfy the debt or judgment. Additionally, if one spouse dies, their share of the property passes automatically to the surviving spouse without the need for probate.

    Tenancy by the entirety is recognized in Maryland as a form of joint ownership of real property and is only available to married couples. It can be created by including specific language in the deed that indicates the property is being conveyed to the couple as tenants by the entirety.

    It’s important to note that while tenancy by the entirety offers legal protection to the shared property, it may not be the best option for everyone. It’s always a good idea to consult with a qualified attorney to determine the best way to own property in your specific situation.

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  • What is a Joint Tenancy?

    In Maryland, a joint tenancy is a type of property ownership arrangement where two or more people own the property together, and each owner has an equal share in the property. Joint tenancy can be used for various types of property, including real estate, bank accounts, and investments.

    In joint tenancy, each owner has an equal right to use and enjoy the property, and all owners must agree to any decisions about the property, such as selling or refinancing it. If one owner dies, their share of the property automatically passes to the surviving owner or owners without the need for probate. This is known as the right of survivorship.

    To create a joint tenancy in Maryland, the owners must include specific language in the deed or title that indicates their intention to create a joint tenancy with right of survivorship. The deed or title must also be recorded with the local land records office.

    It’s important to note that in Maryland, joint tenancy may not be the best option for everyone. There are potential risks associated with joint tenancy, such as the risk of creditors going after the property and the possibility of unintended consequences if one owner dies. It’s always a good idea to consult with a qualified attorney to determine the best way to own property in your specific situation.

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  • What is a Tenancy in Common?

    A tenancy in common is a type of ownership arrangement in which two or more people own a specific piece of property, such as a house or a piece of land. Each owner has a separate, undivided interest in the property, and each owner’s interest can be freely transferred or inherited.

    In a tenancy in common, each owner has a right to occupy the property and use it in proportion to their ownership interest. For example, if two people own a property as tenants in common, one might own 50% of the property and the other might own 50%. Each owner would have the right to use 50% of the property and would be responsible for paying 50% of the expenses associated with the property, such as property taxes and maintenance costs.

    Unlike joint tenancy, where each owner has an equal interest in the property, in a tenancy in common, the owners can have different ownership interests. Additionally, when one owner dies, their interest in the property passes to their heirs or beneficiaries, rather than automatically passing to the surviving owners.

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  • What is a D4A Special Needs Trust?

    A D4A special needs trust (also known as a first-party special needs trust) is a type of trust that is funded with the assets of a person with disabilities who is under the age of 65. The trust is established to provide for the beneficiary’s supplemental care and support while preserving their eligibility for government benefits such as Medicaid and Supplemental Security Income (SSI).

    The D4A special needs trust is named after the provision in the federal law that authorizes its creation, which is found in section 1917(d)(4)(A) of the Social Security Act. This provision allows a person with disabilities to transfer their assets into a trust that is specifically designed to provide for their supplemental needs without disqualifying them from receiving government benefits.

    The D4A special needs trust can be established by the beneficiary, beneficiary’s parent, grandparent, or legal guardian, or by a court. The trust must also meet certain requirements, such as being irrevocable, having a trustee who is independent of the beneficiary, and providing that any remaining assets will go to the state upon the beneficiary’s death. This last part is known as the Medicaid payback provision.

    It is important to note that a D4A special needs trust is subject to certain rules and limitations, and it is recommended to consult with a qualified attorney or financial advisor 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.

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  • 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.

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  • What is the Child Caregiver Exception for Maryland Medicaid?

    In Maryland, the child caregiver exception is an exemption from Medicaid’s “transfer of asset” rules that allows a Medicaid applicant to transfer their home to their adult child who has provided care to the applicant for a certain period of time. The purpose of this exception is to allow elderly or disabled individuals to transfer their home to their child without incurring a Medicaid penalty, provided that the child has lived in the home and provided care to the parent for at least two years prior to the parent’s admission to a nursing home or other long-term care facility.

    Under the child caregiver exception, the Medicaid applicant can transfer their home to their adult child as long as the child has provided care to the parent that has allowed the parent to remain at home and avoid placement in a nursing home. The transfer must also be made as an outright gift, without any expectation of repayment or compensation.

    It is important to note that the child caregiver exception is subject to certain limitations and requirements, and it is recommended to consult with a qualified attorney or financial advisor to understand the specific rules and guidelines for this exemption under Maryland Medicaid.

    Click here to visit RELEP’s Elder Law and Medicaid webpage.

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  • What is a Personal Care Contract?


    In Maryland, a personal care contract is a legal agreement between a future prospective Medicaid recipient and a caregiver, typically a family member, in which the caregiver agrees to provide certain services to the recipient in exchange for payment. The purpose of the personal care contract is to establish a formal arrangement for the caregiver to provide care services, and to document the compensation and responsibilities of the caregiver.

    Under Medicaid rules, a personal care contract is an allowable expense if it is properly structured and the compensation paid to the caregiver is reasonable based on the local market rates for similar services. The contract must be in writing and include specific details about the services to be provided, the compensation to be paid, and the duration of the agreement.

    A personal care contract can be an effective way to manage the cost of long-term care for Medicaid recipients who require assistance with activities of daily living, such as bathing, dressing, and grooming. However, it is important to follow the rules and guidelines established by Medicaid to ensure that the contract is recognized as a legitimate expense and does not result in a penalty or disqualification from Medicaid benefits.

    It is recommended to consult with a qualified attorney or financial advisor to understand the specific requirements for personal care contracts under Maryland Medicaid rules.

    Click here to visit RELEP’s Elder Law & Medicaid webpage.

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