New Law Allows People with Disabilities to Create Special Trust
Finally. The Special Needs Trust Fairness Act, federal legislation that will allow people with disabilities to create their own special needs trusts instead of having to rely on others, has passed the Congress.
The measure was included in the 21st Century Cures Act, a $6.3 billion package of health-related initiatives that has now been sent to President Obama for his expected signature. This has been a frustration for elder law and disability attorneys for many years. It has finally been fixed.
The Special Needs Trust Fairness Act
The Fairness Act, introduced in 2013 by Rep. Glenn Thompson (R-Pa.), will fix an especially frustrating drafting error in the Social Security Act that has prevented people with disabilities from creating special needs trusts to hold their own funds. Under current law, only a parent, grandparent, guardian or court can establish a first-party special needs trust to hold the beneficiary’s assets. This forces a competent person with disabilities to incur unnecessary expenses and waste time to set up a trust that she could otherwise create on her own with the help of an attorney. In most cases, not setting up a special needs trust is not an option, since the trust is typically needed to protect a person with disabilities’ access to government benefits.
The Special Needs Trust Fairness Act inserts language into the Social Security Act to give individuals with special needs the same right to create a trust as a parent, grandparent, guardian, or court. If competent to do so, they can now create a trust on their own behalf using their own assets. The two-sentence bill makes no other changes to the Social Security Administration’s treatment of trusts and it does not alter the requirement that first-party trusts contain payback provisions allowing state Medicaid offices to recoup costs from a trust after the beneficiary’s death. The Fairness Act will apply to trusts established on or after the date that the Cures Act is enacted.
About The Author
Named One of the Main Line’s Top Elder Law Attorneys by Main Line Today
Robert M. Slutsky has practiced Elder Law since 1992 and was one of the area’s first elder law attorney. Mr. Slutsky advises clients on Medicaid and Asset Protection Planning, Guardianships, Wills, Trusts, Powers of Attorney, Estate Administration, Special Needs Planning and General Estate Planning. He has represented for profit and non-profit elder care providers and the Pennsylvania Department of Aging. Mr. Slutsky has been the solicitor for the Montgomery County Office of Aging and Adult Services, the Area Agency on Aging for Montgomery County, for over 15 years.