First Maryland Disability Trust: Pooled Trust Options and How They Work

What the First Maryland Disability Trust Is

When someone with a disability receives a lump sum — a personal injury settlement, a small inheritance, back-pay from Social Security — the money can immediately disqualify them from SSI and Medicaid if it pushes their countable resources above $2,000.

The First Maryland Disability Trust (FMDT) is a nonprofit organization that administers pooled special needs trusts under 42 U.S.C. § 1396p(d)(4)(C). It allows individuals with disabilities to deposit funds into a sub-account within a larger, professionally managed trust. The money is held and invested on the beneficiary's behalf, and distributions are made directly to vendors for the beneficiary's supplemental needs — things like adaptive equipment, therapies, recreation, transportation, and personal care items that government benefits don't cover.

Because the trust is structured as a pooled trust under federal law, assets held within it are not counted toward the SSI $2,000 resource limit or Medicaid asset tests. The beneficiary keeps their benefits intact while still having access to supplemental support funded by the trust.

How a Pooled Trust Differs from an Individual Trust

A pooled trust combines assets from multiple beneficiaries into one investment pool managed by the nonprofit trustee. Each beneficiary has their own sub-account with individualized records, but the pooled investment structure keeps administrative costs lower than a standalone individual trust.

An individual (first-party) special needs trust, by contrast, is established for a single beneficiary — typically by a parent, grandparent, or court. It requires a private trustee (often a bank trust department or an attorney), and setup costs range from $2,500 to $5,000 or more. Annual trustee fees can add another $1,500–$3,000. For someone whose trust balance is under $50,000, those fees consume a disproportionate share of the assets.

The pooled trust route is often the better fit for moderate sums. FMDT charges an enrollment fee and ongoing administrative fees that are generally lower than private trustee arrangements, precisely because the pooled structure spreads costs across many participants.

Who Can Enroll

FMDT accepts beneficiaries who are Maryland residents with a qualifying disability. The trust handles both:

• First-party (self-settled) sub-accounts — funded with the beneficiary's own assets (settlements, back-pay, inheritance paid directly to the individual). Under federal Medicaid rules, first-party pooled trust sub-accounts must include a Medicaid payback provision: when the beneficiary dies, any remaining funds up to the amount of Medicaid benefits received may be retained by the trust for the benefit of other pool members, or the state may recover its share.
• Third-party sub-accounts — funded by parents, grandparents, or other family members using their own money. Third-party sub-accounts do not require a Medicaid payback provision, so remaining funds at the beneficiary's death can pass to other family members as designated.

The distinction between first-party and third-party funding has real consequences for estate planning. Parents who want to leave money to a child with a disability should generally fund a third-party trust (or third-party sub-account) rather than leaving assets directly to the child, who would then need to use a first-party vehicle with its payback obligation.

The ABLE Account Alternative

Since 2017, Maryland ABLE accounts have offered a simpler, self-directed alternative for protecting smaller amounts. An ABLE account can shelter up to $100,000 from the SSI resource limit with no trustee and no court involvement. Annual contributions are capped at $20,000 in 2026 ($35,650 for employed beneficiaries under ABLE to Work).

For ongoing savings and employment income, ABLE accounts are faster and cheaper. For larger one-time transfers — a $150,000 inheritance, a personal injury settlement, a life insurance payout — a pooled trust through FMDT may still be necessary because those amounts exceed what ABLE can hold within the SSI exclusion.

Many Maryland families use both tools: the ABLE account for current savings and small deposits, and an FMDT sub-account for the larger sums that need trust-level protection.

Getting Started

FMDT's enrollment process starts with an application through their office. The trust assigns a case coordinator who walks the family through documentation requirements and helps determine whether a first-party or third-party sub-account is appropriate. Once enrolled, the family submits distribution requests to the trust, which pays vendors directly.

Families coordinating trust decisions alongside SSI, Medicaid, and DDA waiver eligibility — all of which have their own asset and income rules — can find the full sequencing in the Maryland SSI at 18 & Adult Disability Benefits Guide. The guide maps how trust deposits interact with SSI resource counting, Medicaid spend-down calculations, and ABLE account balances.

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