Disability planning in Maryland involves preparing for the possibility that an individual may become unable to manage their personal and financial affairs due to a physical or mental disability. This type of planning helps ensure that the person’s wishes are respected, their assets are managed properly, and their personal care needs are met if they become incapacitated. Disability planning typically includes several legal tools and strategies.
Key Components of Disability Planning in Maryland:
- Durable Power of Attorney (POA)
- Purpose: A durable power of attorney allows an individual (the “principal”) to appoint someone they trust (the “agent” or “attorney-in-fact”) to manage their financial affairs if they become incapacitated.
- Durability: The “durable” aspect means that the POA remains in effect even if the principal becomes mentally or physically incapacitated, unlike a standard POA that may cease to be effective in such circumstances.
- Scope: The POA can grant broad or limited authority, depending on the principal’s preferences, covering tasks such as paying bills, managing investments, handling real estate transactions, and filing taxes.
- Advance Directive (Living Will and Healthcare Power of Attorney)
- Living Will: An advance directive, also known as a living will, outlines an individual’s preferences for medical treatment and end-of-life care. It guides healthcare providers and family members in making decisions that align with the person’s wishes if they are unable to communicate.
- Healthcare Power of Attorney: This document allows an individual to designate a healthcare agent (or proxy) to make medical decisions on their behalf if they are incapacitated. The healthcare agent is responsible for ensuring that the principal’s medical treatment preferences are honored.
- Trusts (Revocable and Irrevocable)
- Revocable Living Trust: A revocable living trust can be used to manage assets during an individual’s lifetime and after their death. The trust allows for seamless management of assets if the individual becomes incapacitated, as a successor trustee can step in to manage the trust assets without court involvement.
- Special Needs Trust: A special needs trust can be established to provide for a disabled person’s needs without disqualifying them from government benefits such as Medicaid or Supplemental Security Income (SSI). This type of trust is often used for individuals with disabilities who may need ongoing financial support.
- Guardianship
- Court-Appointed Guardianship: If an individual becomes incapacitated without having executed a POA or other planning documents, a court may appoint a guardian to make personal and financial decisions on their behalf. Disability planning aims to avoid the need for guardianship by ensuring that proper documents are in place ahead of time.
- Planning for Public Benefits
- Medicaid and SSI: Disability planning often includes strategies to ensure eligibility for public benefits like Medicaid and SSI, which may require careful management of assets and income. Trusts, such as the special needs trust, are commonly used to preserve eligibility while providing additional financial support.
Importance of Disability Planning
Disability planning is essential for several reasons:
- Maintaining Control: It allows individuals to maintain control over their affairs by choosing who will make decisions on their behalf if they cannot do so.
- Avoiding Court Involvement: Proper planning can prevent the need for a court-appointed guardian, which can be a lengthy, expensive, and stressful process.
- Protecting Assets: Planning ensures that assets are managed and preserved according to the individual’s wishes, protecting them from potential misuse or depletion.
- Ensuring Care Preferences: It ensures that medical and personal care preferences are respected and followed.
Conclusion
Disability planning in Maryland involves creating a set of legal documents and strategies that protect an individual’s financial and personal interests in the event of incapacity. By planning ahead, individuals can ensure that their wishes are carried out, their assets are protected, and their loved ones are not burdened with difficult decisions during a challenging time. Consulting with an attorney who specializes in estate planning is often recommended to create a comprehensive disability plan tailored to an individual’s needs and circumstances.