What is a special needs trust and how does it work?

A Special Needs Trust is a trust designed to provide care and benefits for individuals who have a disability or special needs. In Maryland, a special needs trust is often created to provide for the beneficiary’s long-term care and financial stability without disqualifying them from state or federal benefits. A special needs trust usually gives the trustmaker, also known as the grantor, the ability to make decisions about how the trust’s assets will be used to benefit the beneficiary. The trustmaker will also appoint a trustee to manage the trust’s assets and to ensure that the trust’s purpose is met. The grantor may be the individual who created the trust, or it may be someone else, such as a parent or guardian of the beneficiary. The trustee of a special needs trust will use the trust’s assets to pay for the beneficiary’s needs such as medical care, housing, education, recreation, and other necessary items. The trustee may also invest the trust’s assets to ensure the trust can provide long-term benefits and financial stability. In addition, the trustmaker typically places restrictions on how the trust funds can be used in order to ensure that funds are used properly and that the government benefits are not impacted. Ultimately, a special needs trust is an important tool in estate planning to ensure the financial security of individuals with special needs. The trustmaker can customize the trust to meet the beneficiary’s individual needs and ensure that they have access to the care and assistance they require.

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