Who We Serve

Beneficiaries

Supplemental Needs Trusts with A Personal Touch

First Maryland Disability Trust, Inc. (FMDT) offers cost-effective supplmental needs trustee services with a personal touch. FMDT is open to any individual with special needs, regardless of age or disability. Our services include trust management and administration for a variety of trust types.

FMDT accepts new beneficiaries through referrals from attorneys, financial planners, public agencies, and the Maryland court system. Clients can also self-refer to FMDT.

We make referrals to our many resources for clients who need case management, legal advice, or financial planning services.

Trusts

Supplemental Needs Trusts

A supplemental needs trust, also known as a special needs trust or SNT, benefits individuals with disabilities while preserving access to public programs like Medicaid. Special needs trusts have existed for many years but were officially recognized by Congress in 1993 as part of the Omnibus Reconciliation Act.

These trusts are critical to ensuring the care and quality of life of individuals with disabilities. As the name suggests, supplemental needs trust funds may be used for needs not already provided for by the beneficiary’s public or private benefits.

Types of Special Needs Trusts

Special needs trusts can be either first-party or third-party.

First-Party Special Needs Trusts
- Payback Trust
- Pooled Asset Trust (PSNT)
- Medicare Set-Aside Trust (MSA)

Third-Party Special Needs Trusts
- Third-Party Pooled Trust
- Testamentary Trust
- Third-Party – Irrevocable

Access to Special Needs Trust Funds

Once established, beneficiaries may access trust funds by requesting distributions from First Maryland Disability Trust (or their trust manager). Our team of trust managers and assistants then issue the payments promptly.

Special Needs Trust Allowable Expenditures

The trust may pay for things such as:

Automobile/van services
Accounting services
Appliances
Bus/public transportation passes
Camera, film, recorder, tapes, film development
Club dues and memberships
(e.g., health and book clubs, museums, etc.)
Clothing
Computer hardware, software, programs, accessories
Conferences and classes (academic or recreational), school supplies
Dental work not covered by private or public health insurance
Dry cleaning and laundry services
Elective surgery not covered by private or public health insurance

Fitness equipment, personal training
Flowers
Funeral expenses (if paid while the beneficiary is living)
Furniture and furnishings for beneficiary’s home
Gardening supplies and expenses
Gasoline and automobile maintenance
Haircuts/salon services
Home alarm and monitoring systems
Home improvements and repairs, including modifications for accessibility
House cleaning
Insurance
Landscaping and lawn services
Legal services

Medical services and medications not covered by private or public health insurance
Motorized scooters
Musical instruments, lessons, and music
Non-food grocery items, personal care items
Pets and pet supplies, obedience training classes for pets
Snow removal
Sporting goods and equipment, uniforms, team photos
Stationery, stamps
Storage units
Telephone service and equipment
Television and cable service
Tickets for travel, sporting, theatre, and other events
Vacation travel and accommodations

First-Party Special Needs Trusts

Self-Funded Trusts

All first-party trusts are self-funded using the beneficiary’s assets. There are several types of first-party special needs trusts.

Payback Trust

Payback trusts are used for persons of all disabilities, but the individual must be under 65. The payback trust is also called a “stand-alone” trust, because it is funded only with assets belonging to the individual with disabilities to be used for their sole benefit. The beneficiary may add funds to the trust at any time (up to age 65) to avoid unnecessary spend down.

The trust is created by the individual with the disability; parent, grandparent, or legal guardian of the individual with a disability; or by a court order. The assets in the trust are used for the benefit of the individual with disabilities only.

First Maryland Disability Trust Inc. serves as trustee or co-trustee of Payback Trusts.

How Payback Trusts Work

An attorney begins the process by drafting the trust documents. Then, the trust documents are submitted to the Social Security Administration and the Office of the Attorney General on behalf of the State of Maryland for review and approval. Once the trust has been approved, the individual’s funds are placed in the trust.

Remaining payback trust funds when the individual passes away must be paid to the Maryland Department of Mental Health & Hygiene as reimbursement for the cost of medical assistance benefits.

If funds remain in the account after State reimbursement, the trust agreement directs the distribution of the remaining funds. This is whomever is named by the client/grantor as the remainder beneficiary. The remainder beneficiary could be FMDT or the deceased’s estate, “heirs at law,” or named family.

Pooled Asset Trust (PSNT)

Pooled trusts are for individuals of all ages and all disability types. The pooled trust is funded with assets belonging to the individual with disabilities. They can add funds to the trust at any time, even after age 65, to avoid unnecessary spend down.

Pooled Trusts are a good resource for agencies with clients who have funds above what is allowed under the rules of “means-tested” benefits. Using a pooled trust allows the individual with disabilities to “pool” or combine their assets with others’ assets for investment purposes only. Individual accounts are maintained for each person’s interest in the pool.

The assets in this trust are used for the benefit of the individual with disabilities only. First Maryland’s Pooled Trust has no minimum deposit.

First Maryland Disability Trust Inc. serves as the trustee of the pooled asset trust.

How Pooled Asset Trusts Work

Pooled Asset Trust documents are standard documents and have been approved by both the Social Security Administration and the Office of the Attorneys General. To open a pooled trust account, a joinder agreement is signed by the person creating the trust and First Maryland.

While the Pooled Trust is also a “payback trust,” funds remaining in the trust when the individual passes away may be contributed to FMDT for their charitable purposes. Funds can also be used to reimburse the Maryland Department of Mental Health & Hygiene for the cost of medical assistance benefits.

First-Party Pooled Trust Documents:

Second Restated Declaration of Trust – Aug 4, 2023

Second Restated Joinder Agreement – Aug 4, 2023

Second Restated Exhibit B – Aug 4, 2023

Second Restated Exhibit C Post Mortem Instructions – Aug 8, 2023

MDH Approval Letter 2nd Restatement of Trust – Aug 4, 2023

AG 05 11 10 Letter No Penalty for over 65 FMDT

Medicare Set-Aside Trusts

Medicare Set-Aside Trusts are for individuals who have received a financial award as part of a worker’s compensation or personal injury settlement. Funds are “set aside” in a separate account for future medical expenses relating to the case.

A settlement award funds an MSA.

First Maryland Disability Trust serves as the trustee of the Medicare set-aside trust.

Third-Party Special Needs Trusts

A third-party trust is a supplemental needs trust created by family or friends of the individual with disabilities. Any source can fund it except the individual with disabilities. A third-party special needs trust provides for the beneficiary’s well-being while preserving eligibility for public benefits like medical assistance, waiver programs, and supplemental security income (SSI ).

There are different types of third-party special needs trusts.

Third-Party Pooled Asset Trust

A third-party pooled trust is created by family or friends of the individual with disabilities for that person’s benefit. It may be established now and funded immediately, or established now and funded in the future.

Using a pooled trust allows the family of the individual with disabilities to “pool” or combine the trust assets with other’s assets for investment purposes only. Individual accounts are maintained for each person’s interest in the pool.

The assets in the trust are used for the benefit of the individual with disabilities only. First Maryland’s Third Party Pooled Trust has no minimum deposit.

First Maryland Disability Trust manages and is the trustee of the third-party pooled trust.

How Third-Party Pooled Asset Trusts Work

The third-party pooled trust account is established by using FMDT’s Third-Party Pooled Trust Agreement and joinder agreement.

The individual establishing the trust designates where any funds remaining in the account are distributed when the beneficiary passes away. Alternatively, the third-party pool may be established as a trust according to a last will and testament and established at that time.

Third-Party Pooled Documents:

Testamentary Trusts

A testamentary trust is a trust created through provisions in an individual’s last will and testament. It becomes effective upon the death of the individual. The testamentary special needs trust is a “stand-alone” trust.

To qualify as a special needs trust, a will must contain specific language creating the testamentary special needs trust. Once created, the trust is used to benefit an individual with disabilities who is still living.

The individual who created the trust chooses the trustee and a successor trustee. The trust language gives instructions to the trustee as to the distribution of remaining funds when the beneficiary passes.

First Maryland Disability Trust Inc. serves as the trustee of the testamentary trust for accounts it manages.