In Maryland, a buy-sell agreement is a legal contract between co-owners of a business or property that outlines the terms and conditions under which one owner may sell their share to the other owner(s).
Buy-sell agreements are often used to provide a framework for the transfer of ownership in the event of certain triggering events, such as the death, disability, retirement, or voluntary departure of one of the owners. The agreement can also include provisions for the sale of an owner’s share if they default on a loan or violate certain terms of the agreement.
The buy-sell agreement can specify the price at which the owner’s share will be sold, as well as the terms of payment and any other conditions that must be met before the sale can be completed. It can also address issues such as how the business will be valued, who will be responsible for managing the business, and how disputes will be resolved.
A buy-sell agreement can be an important tool for protecting the interests of all co-owners and ensuring that the business or property continues to operate smoothly in the event of unexpected events. It’s important to work with a qualified attorney to draft a buy-sell agreement that meets the specific needs of the co-owners and complies with Maryland law.
Frequently Asked Questions
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What is Probate?
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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 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 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. -
What is an Heir?
In Maryland, an heir is a person who is entitled to receive property or assets from the estate of a deceased person when the deceased dies without a valid will. Maryland’s intestacy laws govern how the deceased person’s estate is distributed when there is no will, and they determine who is considered an heir and what share of the estate each heir is entitled to receive.
Under Maryland law, the deceased person’s surviving spouse and children are typically the first in line to inherit the estate when there is no will. If the deceased person has no surviving spouse or children, their parents, siblings, or more distant relatives may be considered heirs and may be entitled to a share of the estate.
It is important to note that the rules governing intestacy and inheritance can be complex, and they may vary depending on the specific circumstances of the deceased person’s estate. In addition, the existence of a will, trust, or other estate planning documents can also affect who is considered an heir and what share of the estate they are entitled to receive. It is recommended to consult with a qualified attorney to understand the laws and rules related to inheritance and estate planning in Maryland.
Click here to visit RELEP’s Estate Planning webpage. -
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.
