In Maryland, a probate court bond is issued to executors and guardians, and this bond requirement often causes confusion for those new to Maryland probate. This bond requirement is in place for anyone serving as the administrator or executor of the estate of a deceased person and anyone serving as the guardian of an estate for a person with a disability.
The purpose of the bond is to protect the beneficiaries of the estate from wrongful acts or negligence by the executor or guardian that diminishes the size of the estate. The bond acts like an insurance policy protecting the estate. The representative is required to pay an annual premium. The premiums are calculated at one-half of one percent (0.5%), which equates to $500 for every $100,000 of estate assets. The bond company then insures and protects the assets of the estate from any potential losses.
The cost of a probate bond varies depending on the amount of coverage needed. It is based on the total amount of the estate, which also includes the value of any real estate.
The bond companies send representatives to probate court to assist in getting the bonds put in place in a timely manner. In some circumstances, the premiums may be reimbursed by the assets of the estate. For more information on how bonds work and to make sure you follow the proper procedure, please contact Stouffer Legal at 443-470-3599 in the Greater Baltimore area.
We strongly advise our clients to execute proper health care documents like the Health Care Power of Attorney to appoint a health care agent and Advance Directives to make their wishes known on issues involving life-prolonging measures and options. While most intend to get these documents put in place, sometimes it does not happen quickly enough.
What happens when a person is no longer capable of making their own medical decisions? When there is no health care agent appointed, a surrogate may, under certain conditions, act on the person’s behalf.
The Maryland Health Care Decisions Act sets out the circumstances under which someone else can make medical decisions for a person who is unable to make these decisions for himself or herself. The first requirement is that two physicians certify in writing that the person is incapable of making medical decisions.
Individuals may function as surrogates in the following order of priority:
A surrogate can give informed consent for all medical decisions needed. The surrogate should attempt to make decisions based on what the person would choose if capable. If the surrogate has no information about the person's wishes, the surrogate should use the standard of best interest.
For more information on Maryland’s Health Care Decisions Act or planning for health care issues, please contact Stouffer Legal at 443-470-3599 in the Greater Baltimore area.
Our workshops are designed to be educational, interactive, informative and generate relevant discussion for attendees. Modern Estate Planning is more than just preparing a will and putting it in a safe. Find out how a comprehensive Estate Plan will protect your assets and your family. Our experienced attorney, Wilson McManus, will be sharing stories on how Estate Planning is beneficial and sometimes crucial. In an Estate Plan, you need to know the Rules: Who's "Rule-book" controls your Estate Plan? Yours? The Governments? Someone else? You need to know your Predators: Who's a Threat to Your Stuff? The Government? Long-term Care Costs? Your Family? You need to know your Options: What Plans are out there? Does a Will work? What about a Trust? Which kind of Trust?
Please join us for one of our Upcoming Workshops:
March 3rd at 6pm or March 4th at 10am
All workshops are held at the Stouffer Legal Estate Planning Center located at 658 Kenilworth Drive, Suite 203, Towson, Maryland 21204.
Our workshops fill up fast, so please call (443) 470-3599 today to RSVP.
Often adult children find themselves navigating complex long-term care policies purchased by their aging parents in hopes of maximizing the benefits for much needed care. Keep in mind these four tips as you review the policy:
1. Failure to pay premiums could lapse coverage
It is common knowledge that if you do not pay your insurance premiums then the benefits will be denied. However, if the elder missed the premium payments due to a cognitive impairment, a physician’s statement demonstrating this impairment can help with reinstating the policy. An elder law attorney can help you negotiate with the insurance company in this situation.
2. Beware of older policies
Policies written decades ago used much different terminology than those available today. If your parent’s policy is older, there may be issues that arise concerning the language used.
3. Personal care may not be covered
Each policy will outline its activities of daily living (ADLs) requirements. If the elder is not able to perform a certain number of ADLs such as eating on his or her own, bathing, or using the restroom independently then the insurance company may refuse to pay benefits that fall under ‘personal care’ which may include assistance with hygiene, running errands or light housekeeping.
4. Understand the plan’s source and maximum benefits
Long-term care insurance can be an individual plan, an employer-sponsored plan, or another type of group plan. First determine the type of plan and then determine whether the policy covers only one parent or if it’s a joint policy also covering a spouse. These plans typically have a maximum benefit for everyone insured.
For assistance in understanding long-term care insurance, please contact Stouffer Legal at 443-470-3599 in the Greater Baltimore area.
In developing estate plans for individuals who have remarried, we often see a need to help the individual provide income for the spouse while attempting to preserve assets for the children after the surviving spouse subsequently passes away.
Typically, property passed from one spouse to another upon death is not subject to estate tax because it falls under the protection of the ‘martial deduction’. This deduction is unlimited in amount so the surviving spouse will not owe estate taxes; however, it will be subject to estate taxes when the surviving spouse dies. The property allowed to transfer under the marital deduction must not be a ‘terminable interest’.
A terminable interest occurs if the ownership interest terminates during the surviving spouse’s lifetime. There is an exception to this rule, known as the Qualified Terminable Interest Property (QTIP). If properly structured, there is no estate tax due on QTIP property when the first spouse dies, even though the surviving spouse may have inherited a terminable interest.
The most common scenario for this planning strategy is to preserve assets for the children of the initial marriage while providing income to the second surviving spouse while prolonging estate tax until the second spouse dies. There are several requirements that QTIP property must meet. For more information on estate planning in the Greater Baltimore area, please contact Stouffer Legal at 443-470-3599.
Family-owned and small businesses need to plan ahead for the owner’s retirement, death, or disability to ensure the business can move forward intact. This is typically a long-term strategy and ranges from simple to extremely complex depending on the individuals involved and the goals. Succession planning is a multi-disciplinary process. Its components include:
-Estate and Gift Planning: Minimizing the tax consequences of transferring ownership.
-Life Insurance Analysis: Making sure there is adequate life insurance coverage for debts and other financial needs of those left behind.
-Investment Advice: A financial advisor should review the asset allocation and risk assessment alongside the goals.
-Business Valuation: An appraisal of the business value as well as future income is a necessary component. Depending on the stage of the business, the valuation may be an income-based approach, market-based approach or cost-based approach.
-Corporate Structuring: The current entity type may need to be changed during the succession process to meet the needs of the stockholders, new leaders and/or retiring leaders.
-Shareholder Agreements/Stock Transfer: Clean transfer of title will require experienced legal assistance.
-Management Talent Recruitment and Transition Planning: Determining the future leaders may be a lengthy process. Ensuring the right leaders are in place, trained and ready to continue the business is an essential component of the succession plan.
Understanding the factors that drive your company’s growth and continued success requires planning and a multitude of disciplines converging together. Make Stouffer Legal a part of your business strategic planning efforts. Contact us today at 443-470-3599.
Most business owners are so busy running their businesses that they lose sight of the importance of having proper estate planning in place. Personal estate planning coupled with a well-thought out business succession plan is a necessity to prevent chaos from occurring in the event of the business owner’s death or incapacity.
Here are three suggestions for small business owners from experienced estate planning attorneys:
1. Business Succession Planning
When multiple owners are involved a solid buy-sell agreement needs to be in place. These agreements give clear steps of transition and transfer of ownership when one of the owners passes away. They also place restrictions on transferring ownership. Most commonly, these buy-sell agreements allow the surviving owners the ability to pay off the decedent’s beneficiaries in exchange for all the decedent’s share of the company. This prevents a lot of headaches for the remaining owners as well as the decedent’s family. It eliminates the worry of having new owners who have no idea how to run the company and it assures the heirs of proper payment for the decedent’s shares.
2. Life Insurance
In order to have liquid assets available to pay the decedent’s heirs, the company should make sure it has adequate life insurance policies on all of the owners. Without life insurance, the surviving shareholders will have to find other ways to pay, whether from working capital or a business loan.
3. Estate Planning with a Revocable Trust
We often advise small business owners to include a revocable trust in their estate plan. The revocable trust should be funded with the business interests and will state how those interests should be distributed in the event of death.
A trust also avoids probate, which typically causes unnecessary delays and expense to the beneficiaries. For the small business owner, probate also stalls the steady business functions, which can be avoided with a trust in place.
For more information on how to protect your small business interests through proper estate planning and business succession planning or to draft a buy-sell agreement for your business interests, please contact Stouffer Legal at 443-470-3599 in the Greater Baltimore area.
Our workshops are designed to be educational, interactive, informative and generate relevant discussion for attendees. Modern Estate Planning is more than just preparing a will and putting it in a safe. Find out how a comprehensive Estate Plan will protect your assets and your family. Our experienced attorney, Wilson McManus, will be sharing stories on how Estate Planning is beneficial and sometimes crucial. In an Estate Plan, you need to know the Rules: Who's "Rule-book" controls your Estate Plan? Yours? The Governments? Someone else? You need to know your Predators: Who's a Threat to Your Stuff? The Government? Long-term Care Costs? Your Family? You need to know your Options: What Plans are out there? Does a Will work? What about a Trust? Which kind of Trust?
Please join us for one of our Upcoming Workshops:
February 25th 10am or March 3rd at 6pm
All workshops are held at the Stouffer Legal Estate Planning Center located at 658 Kenilworth Drive, Suite 203, Towson, Maryland 21204.
Our workshops fill up fast, so please call (443) 470-3599 today to RSVP.
A special needs trust is a type of trust that helps preserve a disabled person’s eligibility for federal and state benefits by keeping assets out of the person’s name. There are two main types of special needs trusts:
1. First Party Special Needs Trust: The trust is created and funded by the disabled person’s own money. The trust must be irrevocable and the terms of the trust must state that Medicaid will be reimbursed upon the beneficiary’s death or termination of the trust. Often these types of trusts are created out of necessity to keep the disabled person’s benefits in place when they inherit money or receive money from a personal injury lawsuit.
2. Third Party Special Needs Trust: Someone (such as a parent or grandparent) creates and funds the trust for the benefit of the disabled person. It is not required to include the Medicaid payback provision because the remaining assets are not recoverable by Medicaid at the time of the disabled person’s death. These trusts can name remainder beneficiaries to receive those assets.
Special needs trusts are complex documents that must adhere to very specific rules of law. If you have a loved one who is disabled and needs the protections of a special needs trust, please call 443-470-3599 to set up a consultation with one of our experienced estate planning attorneys.
The traditional death care industry, encompassing funeral homes, casket manufacturers, and other products and services related to death and burial, has seen profits decline over the last decade. In 2015, cremation rates surpassed traditional burial rates in the United States. The driving force behind those statistics are cost and the rise of environmentally conscious consumers. Here are a few other ways the death care industry is changing due to millennial involvement:
- Increase use of green burials which are more affordable, involve fewer synthetic chemicals and create less impact on the environment.
- A rise in “Positivity Funerals” having an underlying theme that funerals are a gift to the living. Rather than focusing on grieving over the loss, the attendees focus on celebrating the life of the deceased.
- Funerals and other rituals are becoming more interactive. Relatives and friends are invited to participate in the death care process. They can help to dress them, add make-up and even push the body into the cremation furnace. Mourners are encouraged to add gifts, memorabilia or handwritten letters to the casket.
- Shopping for pricing is also a trend on the rise. Sites like Funeralocity allow users to compare pricing for funeral home services based on zip code. This is driving down some of the costs.
- There is more diversity in the death care industry with approximately 60% of students in mortuary school being female in 2019, up from 5% in 1971.
- Advanced planning is becoming more of a priority at a younger age.
For assistance with funeral planning as part of a comprehensive estate planning package, please contact Stouffer Legal at 443-470-3599 in the Greater Baltimore area.
