If you are responsible for the care of a loved one with special needs, planning for the future carries a different kind of weight. Many clients with at least one disabled loved one ask us:
- What happens to my loved one if I pass away unexpectedly?
- Will an inheritance cause them to lose Medicaid or Supplemental Security Income (SSI)?
- Who will ensure their finances are managed responsibly and sustainably?
- How do I protect assets I want them to have without creating unintended problems?
- How can I make my loved one’s life as stable as possible?
A special needs trust (SNT) may serve as a partial answer to these questions. While it is not a cure-all for concerns about how a disabled loved one will get by once you have passed, it can go a long way towards providing them with financial stability and protection (including from themselves).
The team at Chesapeake Wills & Trusts works with Maryland families who lose sleep over concerns such as these. We help them find a measure of peace with tangible, legally binding, and lasting solutions tailor-made to serve loved ones with disabilities.
What Is a Special Needs Trust (SNT)?
Simply put, a special needs trust is a legal structure designed to hold and facilitate the management of assets for a person with disabilities without disqualifying them from needs-based public benefits. In Maryland, those benefits often include Supplemental Security Income and Medicaid, which can be essential for healthcare, housing, and long-term support.
Why Place Assets in a Special Needs Trust?
Rather than leaving money directly to your loved one, you place assets into a trust managed by a trustee. The trustee uses trust funds to pay for approved supplemental expenses while preserving eligibility for public assistance.
This trustee oversight is particularly important in cases where the beneficiary may lack the capacity to make responsible financial decisions consistently, as is often the case for those living with a developmental disability.
Our Maryland special needs trust attorneys ensure that our clients’ trusts align with federal rules and Maryland-specific requirements. Such compliance promotes the effective performance of that trust over time, as a compliant trust is built to protect and serve your loved one in the long term.
Who Can Establish a Special Needs Trust in Maryland (and Who Can Be Served by One)?
Two questions we frequently hear from clients who have a disabled loved one are “Who can create a special needs trust?” and “Who benefits from a special needs trust?” Let’s look at each question individually.
Who Can Create a Special Needs Trust?
Depending on your unique family dynamics, we can establish a special needs trust if your relationship to the disabled individual is:
- Parent
- Grandparent
- Legal guardian
An officer of the court may, in some circumstances, also establish an SNT. In rare circumstances, a disabled individual may establish a special needs trust, but typically, a non-disabled loved one establishes it for the disabled individual’s benefit.
Each family’s dynamics are unique, which is why we encourage you to contact Chesapeake Wills & Trust as soon as possible to receive more personalized guidance.
Who Benefits from a Special Needs Trust?
The beneficiary of an SNT is typically a person with a physical or mental disability. In many cases, these beneficiaries depend on means-tested government benefits. However, one does not necessarily need to receive government-provided benefits to derive value from a special needs trust.
It’s important to reiterate that the disabled individual benefits from an SNT, but they do not control it. A trustee, who is typically not a disabled individual, will maintain control and make crucial trust-related decisions.
In truth, anyone who wants to see a disabled individual financially stable (and, ideally, thriving) benefits from an intelligently structured SNT. These mechanisms benefit anyone who might otherwise lose sleep over a disabled person’s well-being. In this sense, SNTs can truly benefit entire families, not just the individual for whom the SNT was established.
The Benefits of Establishing a Special Needs Trust
While we have discussed the impetus for establishing an SNT (to protect a disabled loved one), we should be more specific about the key benefits. Some of the most notable advantages of a special needs trust are:
- Preserving Medicaid and SSI eligibility, as the assets in the trust are not technically considered the disabled individual’s own
- Providing funds for expenses that government benefits don’t cover
- Protecting assets from mismanagement (as the trustee, who is someone trusted, will make fiduciary decisions)
- Allowing family members to contribute to the disabled individual in a guilt- and worry-free manner, as they don’t have to be concerned about whether the disabled individual will mismanage their contribution
Addressing the Realities of Your Loved One’s Needs
An SNT is a mechanism for creating long-term financial continuity and stability. Simultaneously, an SNT allows the disabled individual to harness the value of government-provided benefits they are entitled to (and may rely on to an extent that transcends mere financial support).
In Maryland, where long-term care costs continue to rise, the protection of an SNT (or lack of such protection) can determine whether a loved one maintains access to essential services over their lifetime.
Planning for a disabled person’s future cannot be a matter of wishful thinking. Special needs trusts reflect the fact that many disabled people can’t care for themselves, and aren’t in a position to manage their own money or assets.
How Special Needs Trusts Can Directly Improve One’s Quality of Life
A well-drafted special needs trust does more than protect benefits or safely bequeath assets. A robust SNT can facilitate a fuller, more stable life.
This isn’t hyperbole, as we have seen time and again how an SNT may be used for:
- Specialized medical or therapeutic care
- Educational and vocational programs
- Transportation and travel
- Assistive technology
- Recreation, hobbies, and social engagement
- Personal care attendants or companions
Thanks to the reliable trustee overseeing the SNT, these benefits are not realized carelessly, but with responsibility. Plus, because the trust supplements rather than replaces public benefits, it allows your loved one to improve their daily life without risking their most basic needs or financial security.
Why Families Across Maryland Entrust Us With Special Needs Planning
When you are planning for a loved one with special needs, it’s personal. You must implicitly trust your estate-planning team. You can trust us at Chesapeake Wills & Trusts, who consider our relationships with clients to be far deeper than transactions.
Clients in Maryland come and return to us for all their estate-planning needs because:
- We Have Deep Local Roots: Our firm is based in Anne Arundel County, and our attorneys live and work in the same communities as the families we serve. This isn’t just a job for us, but a duty we have to serve our community.
- You Get the Full Benefit of a Dynamic, Collaborative Legal Team: Our attorneys and staff work together to provide continuity of service and clarity in every aspect of your estate planning. SNTs are complex issues, and we encourage you to reach out with even the “smallest” question or concern.
- Our Guidance Comes in Plain English: Our attorneys have legal degrees. You won’t need one to understand our explanations and guidance. You need to understand the plan for your loved ones’ future, and so we communicate with you in understandable terms.
- Our Plans Are Customized and Designed to Last: No two clients will benefit from the exact same estate plan. Expect our recommendations (and your choices) to be 100% personalized, as your family is one of a kind.
Our attorneys are passionate about estate planning. This authentic passion for what we do makes it easy for us to track developments that might affect our clients, including proposed and passed legislation that might affect those considering a special needs trust.
Clients often tell us they felt respected and understood here in a way they had not experienced elsewhere. This isn’t a rare experience at our firm, but a foundational feature of how we serve our clients.
How We May Establish a Special Needs Trust for You
A real estate plan must, for most, be a multi-faceted, air-tight strategy. Simply establishing an SNT requires diligence and thought, and our approach to this process typically entails:
- Understanding Your Loved One’s Needs and Circumstances: We start by discussing the beneficiary’s limitations, daily care needs, living arrangements, and whether they currently receive or may later need government benefits.
- Selecting the Right Type of Special Needs Trust: We help you decide whether the trust should be funded with family assets, the beneficiary’s own assets, or a combination of both, as different legal rules apply depending on the source of funds.
- Drafting the Trust to Preserve Benefit Eligibility: There is fine print surrounding special needs trusts, including details specific to Medicaid and SSI. If SSI or Medicaid is a concern, we structure the trust so assets are not treated as the beneficiary’s resources and distributions remain discretionary.
- Helping You Choose an Appropriate Trustee: An SNT is only as effective as its trustee. We explain the trustee’s responsibilities and help you decide whether a family member, professional trustee, or combination is the best fit.
- Coordinating the Trust with Your Broader Estate Plan: We will ensure the trust works seamlessly with your will, beneficiary designations, and powers of attorney so no unforeseen conflicts arise.
- Ensuring the SNT Is Ready to Go Today: Life is nothing if not unpredictable. We will ensure your SNT and your broader estate plan serve their intended purposes tomorrow, if needed.
Don’t be overwhelmed. Rest assured, we will make this process as seamless as possible. Remember, though, that formulating SNTs and other aspects of your estate plan is an act of love and sacrifice for others’ benefit. It’s not always fun, but it needs to be done—so let’s do it right.
Contact Our Maryland Special Needs Trust Attorneys
Estate planning is one of those things that truly can’t wait. This isn’t about finally taking your shirt to the dry cleaner. This is about ensuring that your loved ones—including those who quite literally cannot care for themselves—are protected in the event of your passing or incapacitation.
Chesapeake Wills & Trusts helps families in Millersville and Severna Park create plans that protect loved ones with special needs. To learn more about SNTs and other ways to care for your loved one, contact us online.