By: David A. (Andy) Hall, Esq.
443-393-7696
andy@elvilleassociates.com

Sometimes an estate client will anticipate that there will be a challenge to her estate after she dies – and frankly if there is a house, then in this area it’s generally worth at least a couple hundred thousand dollars, thus, it’s worth fighting over. Perhaps her children do not get along. Or there is a family business in which one relative has spent many years alongside to build and grow, and the client wishes to leave that relative a larger share of the business. In an effort to prevent challenges to her will, a client may ask her estate planning attorney to utilize an in terrorem clause. These can also be known as “no-contest” clauses. An in terrorem clause essentially states that when someone objects or attacks the will (through the appropriate legal process), then the challenger will no longer receive a legacy or residual distribution that they otherwise would have received through the will.

Under Maryland law, an in terrorem clause in a will is void where there exists probable cause for instituting law suit. Md. Code, Est. & Trusts Art. § 4-413. Someone considering whether or not to challenge a will should consult with an experienced estates and trusts attorney to determine whether there exists probable cause to challenge a will.

An in terrorem clause is ineffective from preventing a challenge by someone who is disinherited as there is no stick (or carrot) to make the challenger think twice prior to challenging. If they have nothing to lose, then there is nothing to prevent them from hiring an estate litigation attorney to challenge the will.

A no-contest or in terrorem clause may still be a good idea to include in your estate planning documents depending on your particular family dynamics. While no clause can prevent all estate litigation, these clauses may be useful in preventing meritless litigation, i.e., a baseless challenge designed to extract a monetary settlement. In addition, it may be a useful tool for your personal representative to use when negotiating a settlement with a will challenger as it can make estate litigation an all-or-nothing proposition.

No one wants to think about their family fighting over their estate. Having a thorough and frank conversation with your estate planning attorney can help identify red flags and allow the planning attorney to attempt to draft around those challenges. One such solution is appointing a third party as personal representative because the disinterested person can help prevent the estate administration from becoming a battle ground for long-simmering family disputes. Avoiding estate and trust litigation before it starts can save your family many tens of thousands of dollars in costs.

Tags: estate litigation, in terrorem clause
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By: Stephen R. Elville, Esq. – steve@elvilleassociates.com

The rules for how income will reduce a Supplemental Security Income (SSI) beneficiary’s monthly benefit can be very confusing.  Here is a quick look at how the Social Security Administration (SSA) treats an SSI beneficiary’s income.

In general, every dollar of unearned income (such as interest or dividends) received by an SSI beneficiary reduces his SSI benefit by one dollar, and every dollar of earned income (such as wages) reduces his benefit by 50 cents.  If these reductions bring the SSI benefit down to zero, then the beneficiary loses SSI and in many cases the Medicaid benefits that come with it.

But before applying these rules, all Supplemental Security Income beneficiaries are allowed to disregard their first $20 of monthly income from any source.  In addition to this initial deduction, beneficiaries who are working can ignore their next $65 of earned income.

In addition to these helpful income disregards, a beneficiary who is working may deduct from her monthly earned income figure any impairment-related work expenses like specialized transportation costs and durable medical equipment required for her job.  It does not matter if the beneficiary also needs those services or supplies to help her outside of work as well.  These expenses are deducted from income on a dollar-for-dollar basis.

For example, if an SSI beneficiary makes $1,000 a month at work and needs to pay $200 a month for a special van to transport him to his job, that beneficiary will have his SSI benefit reduced by $357.50 ($1,000 – $20 income disregard – $65 earned income disregard – $200 impairment-related work expenses = $715 / 2 = $357.50).

Because these income rules can be difficult to implement — even the SSA doesn’t get them right all the time — it’s important to discuss all of your sources of income with your special needs planner prior to applying for Supplemental Security Income.  Every dollar counts!

For more information, please call 443-393-7696 or complete the form below.

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Tags: social security administration, ssi, supplemental security income
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Authored by: Olivia R. Holcombe-Volke,
Esq., 443-393-7696,
olivia@elvilleassociates.com 

In this final posting of my three-part coverage of life estate deeds, I will address the form of life estate deed that is “without powers.” A life estate deed “without powers” means that the life estate tenant cannot sell, mortgage, assign, or otherwise encumber the property without the consent of the remaindermen. However, just as with a life estate deed with powers, during the lifetime of the life estate tenant, the use, possession, and ownership interest of the property doesn’t change, and at the death of the life estate tenant, the remaindermen simply file a death certificate with Land Records, and the property becomes owned by the remaindermen. And, as with a life estate deed with powers, the property held as a life estate without powers is also includible in the life estate tenant’s estate at death, such that the remaindermen get a step-up in basis for capital gains purposes. The pivotal distinction between the two types of life estate deeds, and the tradeoff for sacrificing the power to sell, mortgage, assign, or otherwise encumber the property, is that a life estate deed without powers is only subject to Medical Assistance scrutiny in the first five years following the date of the deed (during which time it is considered a gift that is subject to penalty). Five years after the date of a life estate deed without powers, the property is no longer considered an available asset of the life estate tenant, for Medical Assistance purposes.

A life estate deed is one of several options for use in avoiding probate. It is not the only option, nor is it always the best option, depending on the circumstances of one’s assets, beneficiaries, and goals. When choosing to utilize a life estate deed, the next question of most importance is whether to use one with or without powers, a decision that will primarily rely on the likelihood of the life estate tenant needing Medical Assistance (Medicaid) at some point. As with all decisions regarding one’s estate plan, the best decision is one made in consultation with an experienced estate planning attorney.

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Authored by: Jeffrey D. Stauffer, Community Relations Director — jeff@elvilleassociates.com, 443-393-7696

Stephen R. Elville, Principal at the estate planning, elder law and special needs planning firm of Elville and Associates, P.C., will be presenting on a nationwide webinar through Bloomberg BNA on Wednesday, Octdober 8th from noon to 1:00 p.m. The webinar, titled “What Clients Need to Know About Planning for a Loved One with Special Needs,” will educate listeners about working with a family and their loved one with special needs — from what is involved in the planning process for a special needs family, to the importance of preserving the loved one’s financial security and quality of life.

The key issues of understanding the role of public benefits, making decisions about the future, and using estate planning and trusts to protect assets will be discussed along with the types of special needs trusts and their specific purposes.

To learn more or sign up for the webinar, please click here.

According to its website, “Bloomberg BNA, a wholly-owned subsidiary of Bloomberg, is a leading source of legal, tax, regulatory and business information for professionals. It has a network of more than 2,500 reporters, correspondents and leading practitioners that deliver expert analysis, news, practice tools, and guidance. Its flagship legal product, Bloomberg Law, a fully-integrated legal and business intelligence research solution, combines trusted news and expert analysis with comprehensive market data and cutting-edge technology.”

Mr. Elville works with individuals and families to provide a unique attorney-client experience and peace of mind solutions to the challenges they face with estate, asset protection, and tax planning issues, and with disability and a long-term care planning issues. He has extensive experience in working with clients involved in crisis situations. He also brings a unique and personalized approach to pre-crisis planning. Mr. Elville routinely handles clients issues in the followings areas: wills, trusts, powers of attorney, living wills/advance medical directives, Medicaid asset protection trusts, Medicaid planning and qualification, estate administration, fiduciary representation, nursing home selection, guardianships, special needs planning for children and adults, Social Security Disability Income (SSDI), Supplemental Security Income (SSI) and IRS tax controversy.

Mr. Elville was named to the Maryland Super Lawyers list for 2015, and is a member of the National Association of Elder Law Attorneys, Elder Counsel, Wealth Counsel, the Academy of Special Needs Planners, and the National Network of Estate Planning Attorneys. He currently serves as a member of the Maryland State Bar Association Elder Law Section Council and the Charitable Gift Planning Advisory Committee for Anne Arundel Medical Center. He also serves as Chair for Law Day Maryland.

He is a frequent guest presenter for banks and credit unions, businesses, associations, hospitals, and other facilities and groups. He provides continuing education for financial advisors and CPAs, and is a guest lecturer for the National Business Institute. Mr. Elville’s daily blog appears on WBJC.com and on elvilleassociates-staging.bgbshlgq-liquidwebsites.com and his articles have appeared in The Business Monthly.

For more information, please call 443-393-7696 or complete the form below.

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Authored by: Jeffrey D. Stauffer, Community Relations Director — jeff@elvilleassociates.com, 443-393-7696

Elville and Associates is pleased to announce it will sponsor the 10th Annual Scarecrow Classic 5K and 1 Mile Walk hosted by the Brain Injury Institute of Maryland, to be held on Sunday, October 4, 2015 at its all-new location on the University of Maryland-Baltimore County campus.  For detailed information and to sign up for the event, please click here.

According to the event’s website, “this event will rally survivors, families, friends, and supporters around the common goal of raising awareness about brain injury within the community and providing much needed funding to support the programs and initiatives of BIAMD.”

Elville and Associates fully supports the important mission of the Brain Injury Association of Maryland, which is “to create a better future through brain injury prevention, education, advocacy, and promotion of research.”  For more information about the BIAMD, visit its website at biamd.org, or complete the form below.

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By: David A. (Andy) Hall, Esq. – Elville and Associates, P.C.
443-393-7696, andy@elvilleassociates.com

Ask your estate planning attorney whether you it is advisable to appoint co-personal representatives. Co-personal representatives are two (or more) people named as personal representative simultaneously.  Successor personal representatives are named as backups in case your first choice is unable to serve whether by reason of death, incapacity or unwillingness to serve. You should always name at least one successor personal representative, but two is preferable.

In a co-personal representative situation, Maryland law by default requires the concurrence of all personal representatives in order to act on behalf of the estate. This can lead to issues with the practical aspects of managing the estate, or it can create a friction point in an already tense family situation.

You should consider the motivations for wanting co-personal representatives. If you think that one person might not be able to handle the job alone, you are probably better off appointing someone else altogether. In general, one person will end up doing the majority of the work, but will be hampered by seeking the concurrence/assent of the other personal representative.

If there is a family issue, you can always appoint someone outside of the family. When there is a family dynamic where there is distrust, estrangement, or other issues, then the appointment of co-personal representatives may only serve to exacerbate the situation.

In short, appointing co-personal representatives can lead to unnecessary delay, arguments, or even litigation. It is best to name one trusted individual to serve as personal representative, and name at least one trusted successor. Help avoid estate and trust litigation before it ever happens by contacting your estate planning attorney. Make sure your attorney can competently guide you through not only proper tax planning and asset protection, but also provide counsel to avoid litigation before it starts.

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Authored by: Matthew F. Penater, Partner – Elville and Associates
443-393-7696, matt@elvilleassociates.com

Why do we need an estate plan? Really, why do we need to put our energy into reviewing our assets, hiring an estate planning attorney, making potentially difficult decisions about life-changing events, and talking about our ultimate demise? Because, as my college Ethics professor said, it is the right thing to do. It’s not the right thing to do because it will give us peace of mind that our estates are in order (although that is both a valid and practical reason); it is the right thing to do because we have a responsibility to ensure that our houses are in order when the time comes for someone else to step in. We all know that a good estate plan put together by a qualified estate planning lawyer will ensure your loved-ones receive the benefits of your lifetime of hard work. But it’s more than that. Let’s look at from a different angle – the perspective of not just ensuring our loved ones are cared for, but that they don’t have a mess to clean up after we have passed on. So many people pass away with their finances in a state of mass confusion, important documents scattered to the wind, and their affairs generally a mess. Leaving that kind of situation for your loved ones can cause months of worry, confusion and stress. The last thing most people would want to be remembered for is how much stress and anxiety their death brought to their family. Give it the time and attention your estate plan deserves, if for no other reason than to protect your family from additional stress piled on top of the heartache of losing you.

For more information, please call 443-393-7696 or complete the form below.

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By David A. (Andy) Hall, Esq. – Elville and Associates
443-393-7696, andy@elvilleassociates.com

Here is the scenario: You are a legatee under a will, which means that you are entitled to receive any property disposed of by will, including property disposed of in a residuary clause and assets passing by the exercise by the decedent of a testamentary power of appointment. See Maryland Code, Estates and Trusts Art., § 1-101(l)-(m). The personal representative (the “PR”) (or what’s known as an executor in other states) is behaving in a way that you do not agree with. Your question is whether or not you can have that PR removed.

The Maryland Code in Estates and Trusts Article, §6-306 states that there are six causes for the removal of a PR:

1. Misrepresenting facts leading to her appointment
2. Willfully disregarding the order of the court
3. Incapable or unable to discharge her duties
4. Mismanagement of property
5. Failing to maintain an effective designation of a local agent (this is when the PR is not a resident of the State of Maryland)
6. Failing to perform a material duty of the office

Whether or not a PR’s conduct rises to the level of a court removing that person requires an intensive factual analysis to be performed by your estate litigation lawyer. Some examples of conduct that could lead to the removal of the PR include: attempting to admit the wrong (or a prior) will to probate, which could arise in a situation where one sibling is in one will and then subsequently left out of the estate in a subsequent will. They would have a strong desire to gloss over the existence of the subsequent will.

The willful disregard of an order of the court is easier than some people may assume. If the PR has failed to file an accounting within the proper time, then the court will likely issue a show cause order requiring the PR to either file the accounting or to demonstrate why the accounting has not been filed. Perhaps the PR did not enlist the help of an estate administration attorney, then they could easily misunderstand these deadlines and what they mean. Thus, innocently missing a deadline could lead to disregarding an order of the court and be grounds for removal.

If you believe that the PR of the estate is mishandling her duties, then you should contact an estate litigation attorney to have them evaluate the facts of your case. The last thing that you want is to have a bad acting PR wasting away assets that your family member worked hard to accumulate, spent time and money to effectively plan for the disposition of those assets after their passing, and then not be distributed in accordance with their estate plan.

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Steve Elville gave a presentation today during the Waxter Wisdom Day series at the Waxter Senior Center in Baltimore City. Many Seniors were in attendance and presented many questions that Mr. Elville answered in a Q&A session. Many seniors planning for the future of their legacy may not realize their position until posed with the useful information Mr. Elville and his associates strive to provide the to community. This event gave Mr. Elville an opportunity to reach out and educate those in need of this vital information today.” Please see our schedule to participate in our next event and have your inquiries addressed as well. We are here to assist and protect your future… your legacy.

For more information, please call 443-393-7696 or complete the form below.

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By Stephen R. Elville, J.D., LL.M.

Many clients have expressed to me that they consider their Advance Medical Directive to be the most important of all their legal documents. Whether or not this is the case for you, it is clear that Advance Medical Directives are of tremendous importance to the individuals who take the time to thoughtfully consider the choices available to them under Maryland law and to their loved ones who will ultimately depend upon those choices as a guideline for carrying out important, if not critical, health care decisions. With the recent introduction of MOLST, individual health care decision making can now be even more personalized and definitive. In the following paragraphs, I will outline the highlights of what has recently been disseminated to the elder law and estate planning bar about MOLST by the Maryland Office of Health Care Quality and Maryland Attorney General’s office.

For more information, please call 443-393-7696 or complete the form below.

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