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trusts and encourages the use of certain special needs trusts by individuals with disabilities.42
Te bill also effectively bars some
of the provisions of the Department of Health and Mental Hygiene’s proposed regulations.43 Specifically, the bill states that it is the policy of Maryland
to encourage individuals of any age with disabilities to use a special needs trust or a supplemental needs trust to preserve funds that will provide for the individual’s needs which are not met by public benefits.44
In addition, the bill requires Medical
Assistance and other public assistance programs to promulgate regulations consistent with following provisions.45
• An individual account in a pooled asset special needs trust may be funded without financial limit.46
In
contrast to a $100,000 cap put forth in the proposed regulations, SB 888 permits an individual to fund an account with as much money as he has available. As a result, an individual can keep his or her entire personal injury award in a special needs trust, instead of retaining only $100,000 and having to spend down the rest until he or she is eligible for Medical Assistance.
42 Id. 43 Id. For example, the proposed regulations restricted a pooled asset trust from accepting individual accounts valued at $100,000 or more. By comparison, SB 888 requires that DHMH regulations allow an individual account in a pooled asset special needs trust to be funded without financial limit. MD. CODE ANN. 14-114(C)(2)(I).
44 MD. CODE ANN. 14-114(B). 45 MD. CODE ANN. 14-114(C)(1). 46 MD. CODE ANN. 14-114(C)(2)(I).
20 Trial Reporter / Fall 2011
• A fund in a special needs trust, supplemental needs trust, or pooled asset special needs trust may be used for the sole benefit of the beneficiary including, at the discretion of the trustee, distributions for food, shelter, utilities, and transportation.47
• An individual may establish or fund an individual account in a pooled asset special needs trust without an age limit or a transfer penalty.48
Tis provision is of
particular importance because it clarifies Maryland’s regulations in regards to how Medical Assistance will treat a transfer into a pooled asset trust when determining
eligibility. Tis provision explicitly
allows individuals with disabilities of all ages, including 65-years-or-older, to transfer funds, such as from a personal injury award, into a pooled asset trust without a penalty.
• An individual may fund a special needs trust or supplemental needs trust for the individual’s child with disabilities without a transfer penalty and regardless of the child’s age.49
•
All legally assignable income or resources may be assigned to a special needs trust, supplemental needs trust, or pooled asset special needs trust without limit.50
Biography Jason Frank, NYU School of Law 1979, is President of Frank,
Frank & Scherr, LLC. His elder law, special needs and estate planning practice addresses the legal consequences of age related and other disabilities.
He is the Assistant Baltimore County
Attorney for the Baltimore County Department of Aging. He authored “Elder Law in Maryland”, Lexis Law Publishing Co., 2010 3rd edition 6th revision, and Maryland Medicaid Long Term Care, Bisel, 2008. Mr. Frank co-founded the Elder Law Section of the MSBA and has served, twice, as Chair of the Elder Law Section Council. He is a member of the Special Needs Alliance and the National Academy of Elder Law Attorneys (NAELA); he is a co-founder and past President of the Maryland/ D.C. NAELA Chapter. Mr. Frank is a graduate of Maryland Leadership 2001, “AV” rated by Martindale Hubbell since 1996, has been named a “Super Lawyer” by Baltimore Magazine in 2008 through 2011 and received a Daily Record Leadership in Law Award for 2009. He teaches at the University of Baltimore Law School, Towson University, Te Johns Hopkins University, MSBA CLE programs, and the University of Maryland School of Law. Mr. Frank is also President of First Maryland Disability Trust, Inc., a pooled asset special needs trust. He was designated as a Certified Elder Law Attorney (CELA) by the National Elder Law Foundation in 2009.
47 MD. CODE ANN. 14-114(C)(2)(II). 48 MD. CODE ANN. 14-114(C)(2)(III). 49 MD. CODE ANN. 14-114(C)(2)(IV). 50 MD. CODE ANN. 14-114(C)(2)(V).
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