Maryland Inheritance Tax

Maryland Probate - Inheritance Tax

The Maryland inheritance tax is what I like to call the “sneaky death tax.”

For many families, the imposition of the federal estate tax and the Maryland estate tax is not a practical concern, since these taxes only apply to multi-million-dollar estates. However, the Maryland inheritance tax is a 10% tax on all distributions to individuals who are not otherwise exempt. Here are some common questions regarding the Maryland inheritance tax.

How is the 10% Maryland inheritance tax invoiced?

For example, suppose the last will and testament leaves the decedent’s $10,000 diamond engagement ring to her favorite niece. Along with that engagement ring, the niece will also receive a $1,000 invoice for inheritance tax from the Register of Wills. The niece will need to pay the $1,000 in very short order; otherwise, she will be subject to hefty fees and penalties for not paying promptly.

Who is exempt from the Maryland inheritance tax?

There are many notable exceptions to the Maryland inheritance tax. Chief among them is that spouses and children of the decedent do not pay the inheritance tax.

Who is responsible for paying the Maryland inheritance tax?

If a beneficiary distribution is subject to Maryland inheritance tax, and if the last will and testament is silent, then the beneficiary is responsible for paying the inheritance tax.

What if the distribution is made outside of the probate process?

Here is the sneaky part. Even if the beneficiary receives the distribution outside of the probate process (i.e., inherited as a beneficiary as a payable on death account or through a trust), the beneficiary is still subject to this 10% tax! The way this information is captured through the probate process is that the personal representative is obligated to identify all transactions subject to Maryland inheritance tax by completing the Information Report.

How does the Law Office of Adam J. Roa help?

During our initial consultation, we help identify Maryland inheritance tax issues and develop a plan to address them.

We assist families and beneficiaries through the Maryland inheritance tax process by:

  • Identifying the inheritance tax payment obligation
  • Identifying when the tax should be paid
  • Determining if there is a need to file a Maryland application to fix the inheritance tax (This is necessary when the value of the asset is uncertain or fluctuates.)

 

Probate Creditors

Maryland Probate - Creditors

Creditors are one of the more complicated parts of the Maryland probate process.

One of the core functions of a personal representative is to determine if there are creditors for the estate. Making a mistake regarding creditors is one of the few ways that a personal representative can be held personally responsible for a mistake made in probate administration.

Common Questions

Questions that we are often asked include:

  • How does the personal representative become aware of the various creditors?
  • Should the personal representative contact the creditors or potential creditors?
  • When should the personal representative contact the creditors?
  • Will the creditors sue the personal representative for not paying them?
  • What happens if there are not enough funds in the estate to pay all of the creditors?

Disputing a Creditor Claim

Another common issue is if the personal representative wants to dispute a creditor claim. There is a formal procedure for disputing creditor claims that needs to be strictly processed.

Tax Responsibilities

Taxes are another common issue. The personal representative has the responsibility to pay the decedent’s final income tax return. The personal representative also has the responsibility to pay the estate income tax return, as well as any federal and Maryland estate tax and any Maryland inheritance tax obligations.

Rely on Our Expertise

During our initial consultation with a family going through the probate process, we focus on creditors. We identify the creditors, provide insight into how to collect the needed creditor information, and help address the issue of fighting possible creditor claims.

After the personal representative is appointed and our firm becomes that personal representative’s attorney, our firm—and not the personal representative—becomes the focus for all would-be creditors.

Maryland Probate Process

At its core, the Maryland probate process is the court-required system designed to account for a deceased person’s assets, identify their creditors, and approve the distribution to estate beneficiaries.

For many families, this process can be overwhelming, and many people do not even know where to start. Here is a brief summary to guide you through the probate process.

Probate Process

Maryland Attorney Probate Process

1. Petition for probate

The first place to start is the petition for probate. This is the beginning of the process when the proposed personal representative asks the Register of Wills to accept them as the personal representative and accept the last will and testament presented. You would also need to identify all of the “interested persons” for the estate.

If there is no last will and testament, then the filing of the petition for probate may trigger what is called “judicial probate” and a hearing would occur to determine who amongst the interested persons should be personal representative. Unless excused in the last will and testament or agreed to by all interested persons, the proposed personal representative will have to post bond in order to serve as personal representative.

2. Identify the assets

After a personal representative is appointed, the next step is the more arduous task of identifying probate assets, securing probate assets, and then determining their value. This may involve hiring an outside appraiser.

If a personal representative does not know the whereabouts of the decedent’s assets, then a longer process is involved in an attempt to locate the assets. The personal representative also needs to open a probate estate account and complete a form—called the Information Report—to determine if there are Maryland inheritance tax issues.

3. Complete an administration account

Once the estate assets are identified and secured, the personal representative needs to account for estate expenses and income on a regular basis through the completion of an administration account.

After at least six months after the date of death (or six months after the appointment of a personal representative, if medical assistance is involved), then the estate may begin the process of closing by filing a final administration account. Common issues that slow down the closing process include the sale of the house or the filing of income tax, inheritance tax, Maryland estate tax, or federal estate tax.

Streamline the Process for Your Family

While this brief summary may give the impression that the probate process is straightforward, there are many potential issues at each step that can make the probate process more complicated.

Our approach is to work with the family to streamline the probate process. During our initial meeting, the goal is to identify any unique issues with the probate process for that client, identify paths to streamline the process, and develop a game plan to tackle the probate process.

Medicaid Block Grants

The issue of pushing the costs of Medicaid from the Federal government to the states is picking up new steam.   Instead of being treated as an entitlement program (i.e. if you are eligible then you will be covered), the block grant system will change Medicaid (i.e. Medical Assistance in Maryland) to a program that is funded if the state can afford it.   The bottom line is that less funds would be available for each state, Maryland included, which would mean potentially drastic cuts for Medical Assistance and likely large scale changes to determine who is eligible (i.e. based on stricter criteria).  It will also likely mean that even if a person qualifies, there may not be coverage because there are not enough funds to pay for coverage.   At this point in time, there is great uncertainty as to exactly what changes will occur.  But, there is no question that change is going to occur and that change will mean different more stringent criteria and likely denial of benefits because there are no remaining funds to pay for said services.  As there are new developments and clarity on the issue, I will place additional updates.

Possible Medicaid Changes Proposed by President Trump

One of the various changes proposed by candidate Trump was the idea of shifting Medicaid responsibility from the Federal Government to the States.  The rational proposed by Trump was that such a move would “maximize flexibility to states via block grants so that local leaders can design innovative Medicaid programs that will better serve their low-income citizens.”  As it currently runs, States, like Maryland, really heavily on Federal government support for Medicaid benefits for at risk groups, including seniors in nursing homes.  This proposal is not a new one.  It was first proposed by New Gingrich in 1995, then in 2003 by President George W. Bush and by House Republicans in 2011.  The practical effect to the States would be to reduce Federal funding and shift the payment responsibilities to the States.  The States in turn will either have to dramatically increase taxes to carry the extra burden or reduce reimburse rates to nursing homes, reduce what is covered under Medical Assistance, or likely restrict Medical Assistance eligibility.

As of right now, this is just a proposal.  If this proposal moves forward, I will continue to post the practical impact this will have on Maryland at-risk seniors.

Another Win!

We have another nursing home win! In this matter, the nursing home worked with the client (before we were hired) to file the Medicaid application for her disabled husband. Client knew little of what was involved with the Medicaid application and relied on the nursing home to complete the application and file it.  During the application process the nursing home kept on telling the client everything was fine. 

After being denied twice for Medicaid and 9 months later, the nursing home gave the client a bill in excess of $100,000 and told her to pay it or else they would discharge her husband. In a move even bolder than that, in a moment of crises as he was being taken to the hospital, they literally had her sign a form as she was rushing out the door to the hospital. That form was an acknowledgement of discharge that could bypass all of the Federal and State regulations for discharge. 

Next was the suit by the nursing home against client and her disabled husband in excess of $100,000. Never mind that it was entirely the nursing home’s fault that the nursing home application was denied, and the fact that client did not sign the nursing home contract, the nursing home and their attorneys still sued the disabled husband and client. We immediately filed a motion to dismiss and asked for sanctions. A few days before the motions hearing, the nursing home attorneys filed a motion to dismiss the matter (with prejudice) and paid our attorney fees. I would consider that to be a win!

Guardianship – physician certificates

One of the key items in a guardianship process are the certifications needed to prove to the court that a person lacks the ability to make rational decisions regarding her health or finances. In many cases it may be possible to work with a parent to have them examined by two physicians and the parent is cooperative in the process.

But, what happens if the parent is not cooperative? Or, to make it a little more complex, what if your sibling is keeping your parent at their house and refuses to make them available for an examination? Then, your next step is to file a guardianship petition and explain why the two required certificates are not present. The court’s next step would be to set a hearing for both the parent and the sibling (in my example) to show cause (in person) at the court why the parent should or should not be examined. 

This is a tricky process that should be guided by an elder law attorney. Of particular importance is to try to guard against the sister (in my example) from getting an innocent physician with no experience with the parent to write a one page letter stating that “mom is competent.” It is important to guard and act against such tactics in order to prevent the guardianship process from inappropriately stopping. 

That is why it is critical that why an elder law attorney should be immediately contacted (hopefully before the litigation starts). It is our job to walk the client through the guardianship process and if contested, to walk them through the contested process and what to expect.

Assisted Living Negligence: Key Issues to Consider

There are two key issues to consider for facility negligence:

  1. What is the harm that was caused?
  2. Did the facility breach their standard of care?

A Typical Example

Let’s suppose your mother lives in an assisted living facility. She needs an aide attending to her every time she walks because she’s considered at risk for falling. You’ve had no issues with the facility so far.

One day your mother wants to take a walk and is assisted by an aide. Afterwards, she rests by watching television in the main hall. When she wants to go back to her room, however, the aide that assisted her is not around. The aide’s shift had ended, and instead of waiting for the tardy night shift aide, she simply left.

So your mother decides to walk back to her room on her own. In this attempt, she falls and breaks her leg. She’s admitted to the hospital, suffers complications, and passes.

Key Issues in Negligence Cases

In this case, the facility clearly breached their standard of care. There wasn’t an aide to assist her in moving when she needed it. There was also harm as a result of that breach (assuming the hospital was not at fault).

In other cases, the extent of the damages might not be clear. For example, your parent might still be going through rehabilitation or have an extended hospital stay.

Don’t Be Fooled by Assisted Living Negligence

Don’t let the assisted living facility convince you it’s not their fault. Falling is not to be accepted as just part of the risk of living in that kind of facility.

Take Prompt Action

Assisted living and nursing home negligence matters are complex and time-sensitive. While the example above seems relatively straightforward, there are a number of factors to consider. It’s important to document the possible negligence now, including the issues, events, and names of interested persons.

Give our office a call to discuss your situation. The first half hour of the consultation is free. Our firm can help you hold the facility accountable for their wrongdoing.

Nursing Home Negligence: Medication Mismanagement

In many instances of nursing home or assisted living negligence, medication mismanagement is the direct cause of other issues, such as a resident falling down.

It All Starts Well

Consider this example. Your mother is a resident in an assisted living facility. She needs 9 different medications given to her on a daily basis. She can independently move from room to room and is not considered at high risk for falling.

Problematic Signs

However, you eventually notice that your mother’s pill supplies are being exhausted faster than anticipated. So you remind the assisted living facility of the physician’s prescriptions, including the proper dosages and reasons for medication management.

Signs of Nursing Home Negligence: The Fall

One day, a staff member from the assisted living facility calls to inform you that your mother “unexpectedly” fell. She sustained various injuries and is now at the local hospital suffering from a broken hip and a concussion.

The Untold Cause

What they didn’t tell you was that the nurse in charge of medication management over-medicated your mother. Normally your mother would have no difficulty walking, but due to the side effects, she became drowsy and weak. This led to her stumbling, falling, and injuring herself.

Proving the Assisted Living Negligence

It will be up to you to prove the negligence in this matter. The assisted living facility is being paid to take care of your parent. Don’t let them get away with their negligence.

Call our office, and let us fight for you. The first half hour of the consultation is free.

 

Nursing Home Negligence: Compensation for Disaster

The Facility’s Responsibility

When your parent transitions to a nursing home or assisted living facility, a significant agreement is made. The facility agrees to provide care as your parent needs, in exchange for a hefty monthly fee.

Nursing homes and assisted living facilities often categorize their care into 3 levels. Level 1 is a step up from independent living; the resident needs little supervision. Level 3, on the other hand, indicates a resident that needs regular supervision, similar to a nursing home level of care.

Whatever level of care your parent is in, it is the responsibility of the facility to ensure your parent’s safety. Perhaps that means having a rail on the side of the bed to prevent falls. Or maybe it’s putting an alarm under the bed to alert nurses when a resident moves off the bed. Or perhaps there is the need to have constant assistance moving from place to place.

Signs of Negligence

Here are signs that a nursing home or assisted living facility may be liable for negligence:

  1. The facility is aware of a resident’s unique need.
  2. The facility fails to address that unique need.
  3. As a result, the resident is hurt.

Case in Point

Let’s suppose your mother was recently admitted to an assisted living facility under Level 3 care. Weighing about 160 pounds, she needs the assistance of two aides to move her from any location, such as from the bed to the bathroom.

One morning, one of the nurse aides is running late. Your mother pushes the alert button near her bed, signaling that she wishes to use the bathroom. However, only one aide comes to her assistance. He attempts to get her out of bed, and things are fine—until she puts more weight on the unassisted side and suddenly stumbles. They both fall down hard on the cold, unrelenting floor. Your mother’s thigh bone, already in brittle condition, snaps. She is immediately rushed to the hospital, where she undergoes surgery to set her broken hip.

You are told about this incident immediately by the facility director, who assures you they did everything possible and that accidents sometimes happen. Unfortunately for your mother, the broken hip leads to invasive surgery that leaves her in a weakened condition. She never fully recovers, and her health rapidly worsens. Her surgical wound constantly hurts, and moving her leg also causes her pain. She eventually passes in a nursing home three months later.

This is a case of actionable negligence against the assisted living facility. If they hadn’t violated the standard of care of two nurse aides, your mother would not have fallen to the floor. But because of their negligence, your mother had to endure constant pain over the last remaining months of her life, which was dramatically shortened as a direct result of the injury.

Getting Compensation

If you think your family member has been the victim of negligence in a nursing home or assisted living facility, our law office can help. Sometimes it takes assistance from a lawyer to get the assisted living facility to pay for their negligence. Your family deserves to be compensated for the pain and suffering the negligence caused.

Call our office, and let us fight for you. The first half hour of the consultation is free.