During the last several years, it seems as though more individuals are classified as having special needs. As a result, many Maryland families may be considering establishing a special needs trusts. These trusts are intended to supplement the income individuals with special needs may receive through government programs.
A special needs trust can be set up by either the individual that the trust is intended for or by a parent, legal guardian, grandparent or the court. These are referred to as either first party or third party trusts. In both cases, the disabled individual that the trust is intended for should be under the age of 65. Trusts that are established by a third party are expected to also be funded by a third party and not the individual that the trust is intended for.
However, if a person wishes to establish a trust on his or her own behalf, then that individual must first prove that he or she is capable of making financial decisions. After this has been established, the individual is expected to fund the trust with his or her personal assets. These funds may come from an injury settlement or from a family inheritance.
Disabled individuals and their families may find it comforting to have a special needs trust in place. Maryland residents who are considering establishing a trust for a family member or for their own benefit may wish to consider speaking with a professional. An attorney may be able to help families decide when it is best to start a trust and how best to fund it.
Source: lexology.com, “Understanding the Special Needs Trust Fairness (SNTF) Act“, Danna McKitrick PC, Sept. 27, 2017