Low-Cost Trust Program Created by Bernstein Shur Attorney for Developmentally Disabled in Maine

Families now able to help family members without high legal fees, hassles

A new, affordable way to help pay for expenses of a developmentally disabled family member has been created by a Maine attorney who has a brother with developmental disabilities.

Called the Maine Trust for People with Disabilities (“MTPD”), the new program provides a convenient and inexpensive way for Maine residents to open a trust account that is dedicated to paying for the supplemental economic needs of developmentally disabled family members. A developmental disability includes all forms of mental retardation, but does not include mental illness.
Attorney Jim Houle of the regional law firm Bernstein Shur created the program after finding that the process for setting up a trust of this kind was too complicated and costly for families who want to help a disabled family member. He has volunteered his time to create and administer the trust. Bernstein Shur is one of the sponsors.

For more information, visit www.themainetrust.com or contact Houle at (207) 774-1200 or jhoule@bernsteinshur.com.


“Generally, Medicaid and other major federal programs provide assistance to individuals with disabilities only if they own no more than $2,000 of investments,” Houle said. “This lower limit makes it difficult to give a disabled family member much money to buy the extras that can make an important difference in the qualify of life, including special training, adaptive or athletic equipment, family trips and vacations, gifts, entertainment, and dining out. It also means that if a disabled individual inherits more than $2,000, they will become ineligible for Medicaid and supplemental Social Security benefits.”

Parents, siblings, and other relatives of a developmentally disabled individual can open and fund an account with MTPD for the disabled individual. In addition, businesses and individuals can make tax-deductible charitable contributions to MTPD. These contributions will be used to fund accounts for disabled persons whose families cannot afford to fund an account of their own. The funds in a disabled individual’s account at MTPD will be used to pay for things that government programs will not cover.

MTPD qualifies as a “special needs trusts” under federal law. That means a disabled person will not be disqualified from receiving Medicaid or other important government benefits just because they have a trust account in MTPD.

“In my many years as a practicing lawyer, I’ve seen firsthand how expensive, confusing, and difficult it can be for families to set up a trust that will provide their disabled relatives with the important extras in life that government programs won’t cover,” said Houle. “It can cost thousands of dollars in fees just to have a lawyer write a trust agreement for a disabled person. The annual cost of keeping the trust going can also be very significant. Since I have a brother who is developmentally disabled, it’s been an important issue to my own family.”

Houle brought together a team of seasoned professionals to make the idea of MTPD a reality. Norway Saving Bank serves as the trustee and is also a MTPD sponsor. The MTPD board of overseers, assembled by Houle, runs the daily operations of the trust. The board comprises experienced professionals drawn from social services, business, law, finance, and government.

MTPD allows families to realize savings by using a pre-existing trust. This eliminates the major legal cost families experience when they set up a special needs trust for a disabled family member. In addition, the money contributed to a family member’s account in MTPD is invested only in low-cost mutual funds so that the trust can be run as inexpensively as possible. Before MTPD existed, parents in Maine who wanted a trust for a disabled child had to face the hassle and expense of forming and maintaining a separate trust agreement for a single individual, picking a separate trustee, and deciding on all the key features of the trust. By eliminating these steps, MTPD significantly improves the ways in which families can help disabled members.

MTPD works with social service agencies throughout Maine to provide families with information on how the trust works and how to fund an account. Trained representatives at these agencies are available to meet with families and assist in completing the forms needed to open an account with MTPD. Once an account is opened, it can be funded immediately or later. Parents sometimes prefer to open an account but not fund it until they have died, in which case funding often occurs under the Will of a parent or through a life insurance policy.

More than 8,000 individuals have developmental disabilities in Maine, with over 5,000 people receiving services from the state or a network of non-profit community service providers. More than 7.5 million Americans have developmental disabilities. Over 100,000 newborn babies are added to this number annually. Three out of every 100 children born in the United States have, or will develop, a developmental disability. Of the total population with developmental disabilities, most are mildly affected.

“There is a correlation between poverty and developmental disabilities,” said Houle. “That’s why a trust like this is needed. Simply put, it is an affordable solution for families who want to place only a modest amount in the trust for a disabled relative.”

The major advantages of MPTD:

• No legal fees to draft a trust agreement (typically $1,000 - $5,000 in legal fees to set up a new trust).
• Administration fees for the trust are much lower (typically less than half of the cost of having an individual trust administered).
• An institution serves as a trustee, so the family does not have to look for a trustee.
• The federal laws governing payments from a trust to the disabled person are complex. MTPD administrators understand and follow the federal rules.
• MPTD works closely with most social service agencies in Maine, which provides for a good sense of what the disabled person’s needs are.

Jim Houle, a resident of Scarborough, practices law in the areas of estate planning and employee benefits. He is a 1981 graduate of the University of Maine School of Law, and in 1984 earned a degree of LL.M. in Taxation from Boston University School of Law. He received his B.A. with honors in 1971 from Boston College and an M.F.A from the University of Massachusetts in 1976. He is the founder of MTPD and a founding member and past president of the Maine Employee Benefits Council. He is also a member of the Maine Estate Planning Council, the American Bar Association, and the Maine State Bar Association.

Houle is a member of the Board of Directors of Creative Work Systems, an organization that assists developmentally disabled individuals, and the Portland Museum of Art. Houle is recognized by Best Lawyers in America for his work in trusts and estates, as well in employee benefits, and is a volunteer instructor at the University of Maine Osher Lifelong Learning Institution.

Houle can be reached at (207) 774-1200 or jhoule@bernsteinshur.com, or by writing him at Bernstein Shur, 100 Middle Street, PO Box 9729, Portland, ME 04104-5029.

Bernstein Shur is one of northern New England’s largest multi-service law firms, with more than 80 attorneys in Portland and Augusta, Maine and Manchester, New Hampshire. Established in 1915, the firm provides practical legal counsel to a diverse group of public and private clients throughout the region and around the world. Bernstein Shur’s commercial, litigation, and municipal practices are complemented by the services of the firm’s affiliates, which include Bernstein Shur Government Solutions LLC, a government consulting firm; Stratex LLC, an environmental and engineering consultancy; and Monument Title Company. For more information, visit bernsteinshur.com.

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