Special Needs Trusts

A Special Needs Trust (SNT) allows families to provide financial support for a loved one with a disability without jeopardizing that person’s eligibility for government benefits like Supplemental Security Income (SSI) or Medicaid.

At Holt Legacy Law, we help Maryland families create carefully structured trusts that ensure lifelong care, comfort, and financial stability for individuals with special needs.

What a Special Needs Trust Does

A Special Needs Trust holds and manages money or property for the benefit of a person with a disability. The funds in the trust can be used to enhance their quality of life which covers expenses that government benefits don’t pay for while preserving eligibility for essential public assistance.

A properly drafted SNT can pay for:

• Medical and dental care not covered by insurance

• Educational and vocational programs

• Transportation and travel

• Personal care attendants or therapies

• Hobbies, recreation, and social activities

By keeping assets in the trust (rather than in the individual’s name), the funds don’t count toward the resource limits used to qualify for Medicaid or SSI.

Types of Special Needs Trusts

There are several kinds of Special Needs Trusts, each designed for different circumstances. At Holt Legacy Law, we’ll help you determine which is right for your family.

First-Party Special Needs Trust
Funded with the beneficiary’s own assets such as an inheritance, legal settlement, or back payment of benefits. Federal law requires that any remaining funds in this trust be used to reimburse Medicaid upon the beneficiary’s death.

Third-Party Special Needs Trust
Created and funded by someone other than the beneficiary, most often a parent or grandparent. Because the funds never legally belong to the person with special needs, there’s no Medicaid payback requirement. This is the most flexible and common option for family estate planning.

Pooled Trust
Managed by a nonprofit organization, this type combines assets from multiple beneficiaries for investment purposes while maintaining separate accounts. It’s often used when families don’t have enough funds to justify creating an individual trust.

Why a Special Needs Trust Is So Important

Without a Special Needs Trust, leaving money directly to a loved one with a disability even through a will or life insurance policy can unintentionally disqualify them from vital benefits.

A properly drafted trust ensures:

• Continued eligibility for SSI and Medicaid

• Ongoing financial support for quality-of-life needs

• Professional management and oversight of trust assets

• Peace of mind knowing your loved one will always be cared for

For families with a child or adult dependent who requires lifelong care, this trust is an essential part of a comprehensive estate plan.

How a Special Needs Trust Fits into Your Estate Plan

A Special Needs Trust often works alongside your Revocable Trust and Last Will and Testament to ensure all family members are protected. You can even include provisions in your primary trust to create a special needs subtrust automatically upon your passing.

Learn more about Revocable Trusts »

By integrating your SNT with your other estate planning documents, you create a unified plan that supports every member of your family without triggering benefit complications.

How Holt Legacy Law Can Help

At Holt Legacy Law, we understand that planning for a loved one with special needs can feel overwhelming. We’ll guide you through every step with care and clarity, ensuring your trust meets all legal requirements and achieves your goals.

We will:

• Determine which type of SNT best fits your family’s needs

• Draft a customized trust compliant with federal and Maryland law

• Coordinate your SNT with your will, revocable trust, and other documents

• Help you choose the right trustee and explain their responsibilities

• Ensure your plan provides long-term security and peace of mind

Our mission is to help you care for your loved one—today and for the rest of their life.

Start Planning Today

A Special Needs Trust is one of the most loving and practical ways to provide for your family member’s future.