As a parent of a child with a disability, you might consider creating a special needs trust. In Maryland, this type of trust allows your child to get funding for expenses that fall outside of the food and shelter category. A special needs trust is an excellent way to make sure all your child’s needs, such as purchasing a new phone, vehicle, and traveling are met.
Different Types of Special Needs Trusts in Maryland
First things first, let’s consider the various types of trusts available:
These trusts consist of assets or funds that your child owns, regardless of their age. As a parent, grandparent, or guardian of someone with a disability, you can initiate this type of trust. Also, the individual with a disability can establish this trust themselves and be the lifetime beneficiary. If the lifetime beneficiary of this trust passes away, the state must be reimbursed for medical assistance expenditures covered under Medicaid before any distribution can be made to any other beneficiary.
Trusts funded by someone other than the beneficiary fall into the category of third-party trusts. A third-party trust can benefit an individual with a disability, provided it qualifies as a special needs trust. This type of trust can be established as either a living trust or a testamentary trust (in a will). This type of trust provides much more latitude for customization and does not require reimbursement of the state.
Pooled Special Needs Trust
This type of trust permits a nonprofit organization to consolidate the funds for investment, using a single Master Trust Document that has received prior approval from Social Security and Medicaid.
Steps to Creating a Special Needs Trust
It is best to have an experienced attorney by your side to make sure all the aspects of the trust are accounted for and that it functions with the best interests of your child in mind.
A Letter of Intent is the cornerstone of a special needs trust. It outlines your child’s needs, preferences, and personality. This statement of intent can be updated regularly through a formal maintenance program. This document also contains instructions on how you envision the trust to be used.
The next step is to determine how important decisions will be made. Will it be done through a supported decision-making process or are you going to rely solely on a trustee?
Applying for in-home support and residential services with the Developmental Disabilities Administration (DDA) will ensure the continuity of care and quality of life for your child
Choosing a Trustee
A trustee can be any competent adult, such as a family member or a friend. As the creator of the trust, you can designate the person or persons you trust with this responsibility. A properly created trust should define the procedures for removing and substituting a trustee when you are disabled or deceased..
If you are thinking about planning for a loved one with special needs, consider consulting a committed law office. At Edward S. Clay, P.A. Law Offices, we are proud to serve Maryland residents to help them implement their visions for the future into reality. We co-create estate plans that work. Contact us today to get started.