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.
Frequently Asked Questions
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What is Probate?
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What does it Mean to Die Intestate?
Dying intestate in Maryland means that a person has died without a valid will or other estate planning documents. When a person dies intestate, Maryland’s intestacy laws govern how their assets and property are distributed.
Under Maryland intestacy law, if a person dies without a will, their assets and property will be distributed to their heirs according to a specific order of priority. The deceased person’s surviving spouse and children are typically the first in line to inherit the estate, with the spouse receiving a portion of the estate and the children receiving the remaining balance. 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 dying intestate can be a complicated and time-consuming process, and it can result in the distribution of the deceased person’s assets and property in a manner that does not reflect their wishes. To avoid this, it is recommended to create a valid will or other estate planning documents to ensure that your assets and property are distributed according to your wishes. A qualified attorney can provide guidance and assistance with creating a will or other estate planning documents in Maryland.
Click here to visit RELEP’s Estate Planning and Probate webpage. -
What is a Life Estate Deed Without Powers?
In Maryland, a life estate deed is a type of legal agreement that allows a person (known as the life tenant) to own and use a property during their lifetime, while also designating one or more other individuals (known as remaindermen) to receive ownership of the property upon the life tenant’s death.
Under a life estate deed, the life tenant retains the right to use and occupy the property for the rest of their life, but they cannot sell or transfer ownership of the property without the consent of the remaindermen. Once the life tenant passes away, the remaindermen automatically become the owners of the property, without the need for probate.
Life estate deeds can be used for various purposes, such as to transfer ownership of property to family members while also allowing the original owner to retain use of the property during their lifetime. They can also be used to avoid the costs and delays of probate, as ownership of the property passes directly to the remaindermen upon the life tenant’s death. These types of deeds may also be used in Medicaid planning and asset protection planning.
To create a life estate deed in Maryland, the property owner must execute and record a deed that designates themselves as the life tenant and one or more individuals or entities as the remaindermen. It’s important to note that once a life estate deed is created, it can be difficult to change or undo, so it’s important to consult with a qualified attorney before proceeding with this type of legal agreement. -
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. -
Do I need to have a Contract to Sell Real Estate in Maryland?
Yes, in Maryland, a contract is typically required to sell property. A contract is a legally binding agreement that outlines the terms and conditions of the sale, including the purchase price, the closing date, and any contingencies or conditions that must be met before the sale can be finalized.
The contract is usually prepared by a real estate agent or an attorney and must be signed by both the buyer and the seller. Once the contract is signed, it becomes a legally binding agreement, and both parties are required to comply with its terms.
In addition to the contract, there are several other documents and steps that are typically required to sell property in Maryland. These may include a property disclosure statement, a title search and title insurance, a deed, and various other legal documents.
It’s important to work with a qualified real estate professional or attorney who is familiar with Maryland’s real estate laws and regulations to ensure that all necessary documents and steps are completed correctly and on time. This can help ensure a smooth and successful sale of the property. -
What is a Regular Estate in Maryland?
In Maryland, a “regular estate” is an estate that does not qualify as a small estate and is subject to the standard probate process. This means that the estate must be opened with the Register of Wills, and the personal representative (executor) must follow the procedures and requirements set forth in Maryland law. The estate value thresholds are as follows: $50,000 or greater constitutes a regular estate unless the surviving spouse is the sole legatee, then the “regular estate” filing threshold is $100,000.
The probate process for a regular estate in Maryland involves several steps, including filing a Petition for Probate and Administration, inventorying and appraising the assets of the estate, paying off any outstanding debts or taxes, and distributing the remaining assets to the heirs or beneficiaries.
The personal representative is responsible for managing the estate during the probate process, which may include dealing with creditors, filing tax returns, and distributing assets. The personal representative must also comply with the deadlines and requirements set forth by Maryland law, and must seek court approval for certain actions, such as selling real estate or making significant changes to the distribution of assets.
It is important to note that the probate process can be complex and time-consuming, and it can involve multiple court appearances and legal fees. 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. -
What is a Buy-Sell Agreement?
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. -
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.
