First Maryland Disability Trust and PLAN of Maryland-D.C., Inc. are proud to announce a new strategic affiliation that will expand access to high-quality trust resources and case management for individuals with special needs and their families throughout Maryland. Learn more.

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.


First Maryland Disability Trust: Special Needs Trust Types

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.


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

Contact us for information on distribution request procedures.


first party special needs trusts

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

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 disability trusts

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.

 

First Maryland Disability Trust

1400 Front Avenue, Suite 303

Lutherville, MD 21093

Phone: 410-296-4408

Fax: 410-296-1290

Email: [email protected]