Special Needs Planning: Protecting Your Loved Ones with Disabilities

At Z Family Law, we believe that “creating a legacy of love” means planning with care and intentionality to ensure your family’s well-being, security, and happiness. For families with loved ones who have special needs, creating a legacy requires careful planning to protect their futures and provide stability. Estate planning for beneficiaries with disabilities in Maryland is about more than simply distributing assets—it's about crafting a thoughtful, strategic plan that honors the unique needs of your loved ones, protecting their eligibility for essential benefits while securing their financial future.

In this blog, we’ll cover what makes special needs planning essential, as well as strategies for creating a supportive estate plan that can provide long-term care and protection for your loved one with disabilities.

Why Special Needs Planning Is Essential

Maryland families with loved ones who have disabilities face unique challenges in estate planning. While it’s natural to want to leave assets directly to your family member, doing so without careful planning could inadvertently disqualify them from important government benefits like Supplemental Security Income (SSI) and Medicaid. These programs have strict asset and income limits, and an inheritance or gift could put your loved one’s access to necessary care at risk.

Special needs planning enables you to secure your loved one’s future by ensuring they have access to both personal resources and public benefits. Through strategic planning, you can create a safety net that preserves their quality of life and continues your legacy of love, without jeopardizing their access to critical support.

Key Elements of Special Needs Planning in Maryland

1. Special Needs Trust (SNT)

One of the most effective tools for families is a Special Needs Trust (SNT). An SNT is a legal arrangement that allows assets to be held in trust for your loved one’s benefit without affecting their eligibility for government assistance programs. Maryland allows for three main types of SNTs:

• First-Party Special Needs Trust: Funded with the beneficiary’s own assets (like a personal injury settlement or inheritance) and often used when the individual already has significant assets that could disqualify them from benefits.
• Third-Party Special Needs Trust: Funded by family members or loved ones, this is a highly flexible tool that enables you to leave an inheritance without risking eligibility for government assistance.
• Pooled Special Needs Trusts: Managed by non-profit organizations, pooled trusts combine the resources of many individuals, allowing each beneficiary to retain their own account. This option is often used when there are fewer funds available to create a standalone trust.
  
  

2. Selecting the Right Trustee

The trustee of a Special Needs Trust has a critical role in managing and disbursing funds to benefit your loved one while ensuring compliance with government program requirements. Because the trustee will need to understand complex rules and have the financial skills to manage the trust assets effectively, it's important to choose someone who is responsible, trustworthy, and knowledgeable about Maryland’s rules regarding public benefits.

Many families find peace of mind by appointing a professional trustee or corporate fiduciary, such as a bank or trust company, who can ensure the trust is managed professionally. If you’re considering appointing a family member, ensure they are prepared to carry out these responsibilities or that they have access to professional guidance.

3. Letter of Intent

While not a legally binding document, a Letter of Intent can be an invaluable part of your special needs plan. This letter provides guidance to future caregivers and trustees about your loved one’s preferences, routines, needs, and aspirations. Including details about daily care, medical preferences, social activities, and education can offer reassurance that your loved one’s life will be managed in line with your family’s values.

4. Guardianship or Power of Attorney

If your loved one with special needs is over 18, they are legally considered an adult in Maryland, regardless of their ability to manage their affairs. In these cases, establishing legal guardianship or a power of attorney may be necessary to ensure their medical, financial, and personal decisions are made by someone they trust.

It’s essential to work with an attorney to understand the different options available in Maryland, as well as the process for appointing a guardian or agent under a power of attorney.

Additional Considerations in Maryland Special Needs Planning

In addition to these foundational steps, Maryland families may also want to consider these additional aspects of special needs planning:

• ABLE Accounts: ABLE (Achieving a Better Life Experience) accounts are tax-advantaged savings accounts that allow individuals with disabilities to save up to $100,000 without impacting their SSI benefits. Maryland residents can use ABLE accounts for a wide range of expenses, from housing and transportation to health care, making them an excellent supplement to an SNT.
• Funding the Trust: Consider how you will fund the Special Needs Trust—whether through life insurance, savings, or investments. Many families in Maryland opt for life insurance as it provides a predictable amount of funding for the trust without tapping into other assets, ensuring a steady source of support for your loved one.
• Periodic Review of Your Plan: Laws and benefit programs can change, so it’s essential to review your estate plan regularly to ensure it still aligns with Maryland regulations and your family’s needs. Life events, such as changes in health, inheritance laws, or tax codes, may also necessitate adjustments to your special needs plan.
  
  

Create a Legacy of Love

Special needs planning is one of the most meaningful ways you can protect and provide for your loved ones with disabilities. At Z Family Law, we’re here to help Maryland families create comprehensive estate plans that honor your family’s love and commitment to one another. By planning for the future now, you’re taking a powerful step to secure your loved one’s well-being, independence, and quality of life.

If you’re ready to begin creating a legacy of love for your family, contact us today at (301) 781-6683 to schedule a consultation. Together, we can help you create a customized special needs plan that reflects your family’s values and provides peace of mind for years to come.