Columbia and Bethesda Attorney Answers Frequently Asked Questions About Maryland Estate Planning, Special Needs Planning, Medicaid/Long-Term Care Planning, and Veterans Pension Planning

McDonald Law Firm in Columbia and Bethesda answers frequently asked questions below related to Maryland estate planning, special needs planning, Medicaid/long-term care planning and veterans pension planning. If you have other questions or require immediate assistance in one of these areas, call 443-741-1088 to schedule an initial consultation regarding your legal concerns.

What is a Second Amendment Trust™, and how does it work?

Many types of firearms, including machine guns and certain rifles and shotguns, must be registered with the ATF, and they can only be possessed by their registered owner. Passing down a firearm, regulated by the National Firearms Act (NFA), to the next generation requires a cumbersome and expensive process of getting approval for the transfer from the ATF, paying a sizable tax, and submitting the new owner to photographing and fingerprinting with the government.

A Second Amendment Trust, also known as a gun trust, gets around these burdensome requirements. By placing your NFA regulated firearms in a gun trust, their lawful use and possession can pass to anyone named in the trust as trustee, except individuals prohibited by federal and state law from possessing a firearm, and you can name multiple trustees if you choose. A Second Amendment trust avoids the federal transfer tax and other requirements usually associated with weapons transfers. Care should be taken in drafting and administering a gun trust to make sure it complies with all applicable state and federal laws.

What is a Special Needs Trust?

If you have a child with a disability, you know that child may need additional financial support throughout his or her lifetime to deal with medical issues or to supplement income due to limited employability. Government programs such as Medicaid and Supplemental Security Income (SSI) can provide monthly financial assistance, but these programs are means tested, and recipients of government assistance must keep very low income and asset limits to maintain their eligibility for benefits. A gift or inheritance therefore can wipe out a person’s ability to receive much-needed assistance.

The answer in these cases is a special needs trust. Funds can be placed into the trust and used by the beneficiary with special needs, without destroying the recipient’s income eligibility for SSI or Medicaid. Make sure your attorney is skilled and knowledgeable about special needs trusts to create a valid and enforceable trust. 

How is a Self-Settled Special Needs Trust different from a Third Party Special Needs Trust?

A self-settled special needs trust is funded with a beneficiary’s own assets, as opposed to being funded with the assets of a third party. A self-settled special needs trust is an estate planning tool, which can be created by a parent, grandparent, guardian, or a court in order to maintain a special needs child eligibility for government mean-tested benefits (such as Medicaid and Supplement Security Income). A major difference between a self-settled special needs trust and a third-party special needs trust — is the Medicaid payback provision a self-settled special needs trust must have in order for the self-settled special needs trust assets not be counted for Medicaid income eligibility purposes.

What is Long-Term Care?

In layman’s terms, long-term care (LTC) is a wide range of services and support an individual may need to meet their personal care needs. For the most part, long-term care is not medical care, but rather assistance with the Activities of Daily Living (ADL) or basic personal tasks of everyday life. Long-term care encompasses ADLs such as: bathing, dressing, eating, transferring to or from a bed or chair, using the toilet, and caring for incontinence (the inability to maintain control of one’s bowel or bladder functions).

What is Medicaid?

Medicaid is a joint state and federal program that pays for long-term nursing home care and home care for people who cannot afford to pay for their own care. In Maryland, Medicaid is known as the Maryland Medical Assistance Program. In addition to paying for the cost of care for an institutionalized individual, Medicaid also protects spouses who would otherwise become impoverished because of the cost of long-term care. It does this by safeguarding a significant part of the couple’s combined income and assets. But even with these special rules for couples, known as Medicaid’s spousal impoverishment protection, the amount of assets and income a couple is allowed to keep while one of them is receiving Medicaid is limited.

Will Medicaid Pay for Assisted Living?

In Maryland, Medicaid pays for assisted living if an individual requires a higher level of care like skilled nursing care. However, a waiver is required in order to qualify for this program. The Maryland Waiver for Older Adults program permits individuals that need skilled nursing care to obtain it in their own home or at an assisted living facility. Older adults often prefer to live at home and this waiver assists them in doing so. Maryland determined that the cost of care for an older adult at home is less expensive for the state than it would be to place the individual in a nursing home. The cost of care is minimized because home care utilizes assistance from family members. Since the program is so popular in Maryland, there is currently a waiting list.

What Does Medicaid Cover?

Medicaid covers a wide range of long-term care services and support for individuals with limited income who meet specific eligibility requirements. Covered services under Medicaid include skilled nursing care in a nursing home, group home or other home and community-based settings as well as personal care services that assist people at home with activities of daily living.

What is Survivors Pension?

Survivors Pension benefit is a tax-free monetary benefit payable to a low-income, un-remarried surviving spouse and/or unmarried child(ren) of a deceased Veteran with wartime service. This benefit is also referred to as Death Pension.