SoMD Estate Planning

Estate Planning Attorneys in Southern Maryland

medicaid planning

What Is an Irrevocable Trust and When Does It Make Sense?

While revocable trusts get most of the attention, irrevocable trusts serve a different and powerful purpose. Once established, an irrevocable trust cannot be easily modified or dissolved — but in exchange, it offers significant benefits for asset protection, tax planning, and Medicaid qualification that revocable trusts cannot provide.

How Irrevocable Trusts Differ

Unlike a revocable trust, once you transfer assets into an irrevocable trust, you generally give up control over them. In exchange, those assets may be protected from creditors, excluded from your taxable estate, and not counted for Medicaid eligibility purposes. Common types include irrevocable life insurance trusts, charitable remainder trusts, and asset protection trusts. These are powerful tools for families with larger estates or specific protection goals.

At SoMD Estate Planning, we provide personalized guidance tailored to your specific situation. Contact us for a free consultation.

Medicaid Planning and Estate Planning: What Maryland Seniors Should Know

The cost of long-term care in Maryland can quickly deplete a lifetime of savings. For many seniors, Medicaid is the only option to cover nursing home costs — but qualifying requires meeting strict asset and income limits. Medicaid planning is the process of structuring your finances to qualify for benefits while preserving as much wealth as possible for your family.

The 5-Year Look-Back Period

Maryland Medicaid has a five-year look-back period for asset transfers. This means any gifts or transfers made within five years of applying for Medicaid can result in a penalty period of ineligibility. Planning must begin well in advance to be effective. Strategies may include certain types of irrevocable trusts, spousal protections, and careful asset restructuring — all of which require guidance from an experienced attorney.

At SoMD Estate Planning, we provide personalized guidance tailored to your specific situation. Contact us for a free consultation.

Special Needs Trusts: Protecting a Loved One Without Losing Government Benefits

If you have a child or family member with special needs, leaving them an outright inheritance could actually disqualify them from essential government benefits like Medicaid and Supplemental Security Income. A special needs trust preserves their eligibility while providing supplemental support for a better quality of life.

How a Special Needs Trust Works

A special needs trust — also called a supplemental needs trust — holds assets for the benefit of someone with a disability without counting those assets toward benefit eligibility limits. The trustee can use trust funds for expenses not covered by government programs: recreation, education, personal care items, travel, and more. The key is that the trust supplements rather than replaces government benefits.

Types of Special Needs Trusts

A third-party trust is funded by someone other than the beneficiary — typically parents or grandparents — and has no payback requirement to Medicaid. A first-party trust is funded with the disabled person’s own assets and must include a Medicaid payback provision. Each has different rules and applications depending on the situation.

Planning for a loved one with special needs requires specialized knowledge. Contact SoMD Estate Planning to discuss your family’s options.