Legal Blog

The Weekly Scenario: Special Needs Trust in Different States

Question: I would like to set up a special needs trust for my grandchild who lives in Maryland. I live in Ohio currently, but may move to Maryland in the next few years. Who should I have prepare the trust, an Ohio or Maryland estates & trusts attorney?

Answer: You should start with Ohio counsel, but since you might move to Maryland and since the beneficiary lives in Maryland, it would be best to have the trust also reviewed by Maryland counsel. The Medicaid and other benefit programs are very state specific and the laws, as they apply to special needs trusts, are as well. In the special needs area, it becomes very important to seek local counsel because the rules are so varied from state to state. In this context, I would seek the advice of counsel in both jurisdictions.

It is difficult to predict the future and it is certainly possible that your grandchild might end up moving to a different state that is not Ohio or Maryland. If the beneficiary does end up moving, it is advisable to have the trust once again reviewed by local counsel.

Comment: Special needs trusts are used in many different situations to address a ‘special need’, but the most common is to assist a beneficiary who has a chronic physical or mental health issue. A special needs trust might also be used to protect a loved one who could have addictions to drugs or alcohol. The funds can be managed by a trustee to provide for basic physical needs and rehabilitation services, while preventing its confiscation for reimbursement to government programs.

ABOUT STEVE SHANE

Steven E. Shane

Steve Shane provides strategic counseling to clients in need of estate administration, charitable giving and business continuity planning while minimizing estate, gift, and generation-skipping transfer tax exposure. He offers legal guidance to clients on asset protection and the proper disposition of assets in accordance with the client’s objectives, while employing tax planning techniques such as the use of irrevocable trusts, life insurance planning, lifetime gifts and charitable trust. He is also experienced with drafting documents for business planning, the incorporation and application for exemption for Private Foundations and the administration of decedents’ estates.

 

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