SoMD Estate Planning

Estate Planning Attorneys in Southern Maryland

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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.

Estate Planning for Small Business Owners in Southern Maryland

If you own a small business in Southern Maryland, your estate plan must account for more than personal assets. Without a succession plan, your life’s work could be disrupted, devalued, or lost entirely.

Key Elements of a Business Succession Plan

Identify your successor — family member, partner, key employee, or outside buyer. Create a buy-sell agreement with terms and pricing. Consider life insurance to fund a buyout. Ensure your business entity documents address death or disability. Coordinate with your personal trust and will. A durable power of attorney or funded trust ensures someone you trust manages operations if you become incapacitated.

SoMD Estate Planning works with small business owners throughout Southern Maryland. Contact us for a free consultation.

Maryland Estate Tax vs. Inheritance Tax: What Is the Difference?

Maryland is one of only a few states in the nation that imposes both an estate tax and an inheritance tax. These are two separate taxes that can significantly impact what your family receives. Understanding the difference — and how to plan for both — is essential for protecting your legacy.

The Maryland Estate Tax

The estate tax is a tax on the total value of a deceased person’s estate before it is distributed to heirs. Maryland’s estate tax exemption is $5 million — meaning estates valued above this threshold are subject to Maryland estate tax at rates up to 16%. This is separate from and in addition to the federal estate tax exemption, which is significantly higher.

The Maryland Inheritance Tax

The inheritance tax is different — it is a tax on what individual beneficiaries receive, not on the estate as a whole. Maryland’s inheritance tax rate is 10% on the value of assets received. However, certain beneficiaries are exempt: spouses, parents, grandparents, children, grandchildren, siblings, and certain other close relatives pay no inheritance tax. The tax primarily affects more distant relatives and non-related beneficiaries.

How Both Taxes Can Apply Simultaneously

In a worst-case scenario, a large estate could be hit with both the estate tax on the overall estate value and the inheritance tax on distributions to non-exempt beneficiaries. Proper planning can minimize or eliminate both taxes through strategies like lifetime gifting, charitable giving, trust structures, and proper use of marital deductions.

Plan Ahead to Protect Your Family

Tax planning is a critical component of estate planning in Maryland. At SoMD Estate Planning, we help families understand their potential tax exposure and implement strategies to minimize it. Contact us for a free consultation to review your situation.

Choosing the Right Executor for Your Will: A Practical Guide

Your executor — called a personal representative in Maryland — is the person responsible for carrying out the instructions in your will. Choosing the right person for this role is one of the most important decisions in your estate plan, yet many people make this choice without fully understanding what the job entails.

What Does an Executor Actually Do?

Your executor files the will with the court, inventories your assets, notifies creditors, pays outstanding debts and taxes, manages estate assets during probate, distributes assets to beneficiaries, files final tax returns, and provides accountings to the court. It is a significant responsibility that can take months to complete.

Qualities to Look For

The best executor is someone who is trustworthy and honest, organized and detail-oriented, financially responsible, willing to serve, available to dedicate the time required, and able to remain impartial if family dynamics are complex. While it does not need to be a family member, it should be someone you trust completely.

Can You Name a Professional Executor?

Yes. Some people choose to name an attorney, accountant, or professional fiduciary as their executor. This can be a good option if family dynamics are complicated, your estate is large or complex, or no suitable family member is available or willing.

Always Name a Backup

Always designate an alternate executor in case your first choice is unable or unwilling to serve when the time comes. Without a named backup, the court will appoint someone.

Need help choosing the right executor and structuring your will? Contact SoMD Estate Planning for personalized guidance.

What Happens to Your Home When You Die Without a Trust in Maryland?

For most Maryland families, their home is their largest asset. Yet many homeowners in Southern Maryland have not planned for what happens to their property when they pass away. Without a trust or other probate-avoidance strategy, your home will go through the full probate process — costing your family time, money, and stress.

Your Home and Probate

When you die, any real property titled solely in your name becomes a probate asset. In Maryland, this means the Orphans’ Court oversees the transfer of your home to your heirs. Your family cannot sell, refinance, or transfer the property until the probate process is complete — which can take six months to over a year.

How a Trust Protects Your Home

By transferring your home into a revocable living trust, you retain full control during your lifetime but ensure the property passes to your beneficiaries immediately upon your death — without probate. Your successor trustee can manage, sell, or distribute the property according to your wishes without court involvement.

Other Options for Homeowners

Joint tenancy with right of survivorship automatically transfers ownership to the surviving co-owner. However, this approach has limitations — especially if you want the property to pass to someone other than a co-owner. A trust provides more flexibility and control.

If you own a home in Charles County, Calvert County, St. Mary’s County, or Prince George’s County, proper planning for your real estate is essential. Contact SoMD Estate Planning to discuss the best approach for your situation.