Elder Law
"Time Magazine" has referred to Elder Law attorneys as "kinder, gentler attorneys." Byrd & Byrd’s Elder law attorneys are extremely compassionate and knowledgeable. They are aware of the importance of the smaller things, such as printing documents in larger type and having a handicap accessible office. Providing top quality legal services to seniors and those who love them brings peace of mind to our clients as they face the difficult challenges of the aging process. We help our clients pull together all the pieces of estate planning, government benefits, asset preservation, appropriate housing and care-giving options, along with good counsel concerning the multitude of challenges that they face.
Table of Contents
Estate Planning | Asset Preservation and Asset Protection | Last Wills and Testaments | Medicaid Planning | Trusts |
Estate Planning
A good estate plan will help you, your heirs, and your loved ones reduce administration costs, probate costs, taxes, attorney’s fees, and arguments among your heirs. By planning your estate you ensure that your property will go to the people you want, when you want, and in the way you want, so that your loved ones can mourn your loss without having also to deal with potentially costly and litigious financial issues.
Estate plans vary based on the individual but may include financial and health care Powers of Attorney, an Advanced Medical Directive, a Last Will & Testament, Medicaid planning, gifting, estate tax planning, and one or more of a variety of Trusts. A Last Will & Testament is for the management and distribution of your property after you die; whereas, Powers of Attorney and Advanced Medical Directives are used for the management of your property and making health care decisions before you die. Trusts can be used to manage your property both before and after you die. Regardless of your specific situation, estate planning will ultimately benefit you and the ones you leave behind.
Asset Preservation and Asset Protection
Guaranteeing the safety of your income and assets is crucial. Not only does it provide you with peace of mind, but it can also ensure your current funds will be available in the future to cover your costs as you age. In this time of economic difficulty and confusion, it is important to make informed decisions when it comes to investments, income, insurance plans, IRAs and much more. Make sure you are prepared for any unanticipated circumstances, especially the possible need for long term care, that might threaten the security of your assets. Given the complex laws and regulations associated with asset preservation and protection, a consultation with an attorney can be invaluable in helping you preserve your assets.
Last Wills & Testaments
A Last Will & Testament is an essential part of anyone’s estate planning as it explains how someone wants their property given away or used after their death. Someone who creates a Will is called a testator (or testatrix) and the assets they leave behind through their Will are called their “probate estate”. A Will can be drafted to place restrictions on gifted property, designate preferred guardians for children, and even create testamentary trusts.
A Will also does not transfer property owned in trust created outside the Will or other property such as bank accounts or real estate held as joint tenants, tenants by the entirety, or with pay on death designations.
If someone dies without a Will they are considered to have died “intestate” and their probate property will pass based on the intestacy law of the State or District in which they live. In Maryland and D.C. such property typically will go to a spouse and children of the testator or, if they died without immediate family, to more distant relatives or even to the State in which they lived. Although that may suit the desires of some, for many people that statutory distribution is much different from how they would have liked to have given away their assets.
Medicaid Planning
Many people are afraid that they will end up in a nursing home because their family cannot provide the level of care they require as they get older. Not only does this mean losing the autonomy of living at home but it means spending all, or most, of one’s lifetime of savings. In 2011, a typical nursing home in the Maryland and D.C. area can cost over $100,000 a year. That cost is expected to continue to rise. For many people, this cost means that their savings will quickly run out and they will have to rely on government programs such as Medicaid. People who do not need immediate long-term care are in the best position to protect the maximum amount of assets. The law provides several ways to do this prior to Medicaid’s five (5) year look-back period. The “look-back” is a period of time (currently five years) during which the State of Maryland has the legal right to review your financial records and determine what, if any, transfers you have made for less than fair market value (i.e., gifts). If you have made any gifts during this “look back” period, then the State may impose a penalty period before benefits will be paid. Medicaid planning can help avoid, or minimize, this penalty period, during which you must pay with your own funds.
Even if there is a penalty period imposed, Medicaid planning can help you cure and/or reduce that penalty period, and save many of your assets through a variety of techniques.
Your best strategy is to consult with our experienced Medicaid attorneys who can advise you on how you can save your hard-earned assets and provide longer and better care for you or your loved one.
Trusts
Trusts are created for a number of reasons, primarily for the purpose of keeping property, whether it be real or personal, tangible and intangible, for the benefit of another individual. There are multiple types of trusts, each designed to fulfill a specific need and outcome. There are Special Needs Trusts, Credit Shelter Trusts, Revocable and Irrevocable Trusts, and Testamentary Trusts. In order to determine what type of trust you may need or be interested in, consult one of the attorneys at Byrd & Byrd.
Credit Shelter Trusts
A Credit Shelter Trust, sometimes referred to as a bypass trust, allows a married individual to reduce estate taxes when passing on their assets to designated heirs. In such a trust, it is prearranged that when the surviving spouse passes away, the assets are transferred to the beneficiary (or beneficiaries) named in the trust. One typical stipulation with credit shelter trusts is that the surviving spouse retains the rights to the income generated from the trust for the remainder of his or her life.
Revocable and Irrevocable Trusts
Revocable Trusts
Revocable or “living” trusts allow complete control to the person creating the trust, often called a trustor, creator, settlor, grantor, founder, or donor. The trustor may change, revoke, or terminate the trust at any time and take back the funds. These trusts can be very useful in allowing a trustor to reap the benefits of a trust while maintaining the power to change it at any time before death. Revocable trusts are generally used for asset management, probate avoidance, and estate tax planning; however, revocable living trusts will not protect your assets from lawsuits, or if you have to qualify for government benefits in order to pay for long term care. Revocable trusts are not used for Medicaid planning or asset protection.
Irrevocable Trusts
Irrevocable trusts generally cannot be terminated and can only be changed in limited ways after they are created. Any assets transferred to the trust may only be used or distributed by the trustee as dictated by the terms of the trust document. Although the trustor may be entitled to receive income from the trust, the trustor does not have the right to the principal in the trust. This type of trust is often used for the protection from potential creditors or for Medicaid planning purposes.
Special Needs Trusts
A Special Needs Trust (“SNT” or Supplemental Needs Trust) provides for a disabled person’s needs based on the decisions and discretion of the trustee. An SNT is typically used to help support a disabled person eligible for government financial aid. To avoid impacting government aid eligibility, SNTs are typically set up to pay for their needs above and beyond what the government benefits cover (e.g. food, shelter, or clothing). This can include luxuries; travel and transportation; housekeeping; personal and professional services; telephone & internet; legal expenses; expenses for family visits; funeral costs.
SNTs are typically set up by a parent or grandparent who does not have a legal obligation to support the disabled person. However, a disabled person can self-settle a SNT for their own benefit. These SNTs are typically irrevocable and provide that amounts remaining in the SNT when the disabled person dies will repay Medicaid for any incurred expenditures. Estate planners, or personal injury attorneys representing a disabled person, need to consider the financial impact of inheritances or injury settlements on their client’s government aid eligibility.
Testamentary Trusts
A testamentary trust is one created by a person in their Last Will & Testament which becomes effective only after that person has died. Although a testamentary trust will not avoid probate, it can be useful in reducing estate taxes for married individuals, managing assets given to a minor child, or providing for the care of a disabled individual.
