Yesterday, the Senate passed the Special Needs Trust Fairness Act. After the President’s signature, individuals with disabilities, who have capacity, can create their own (D)(4)(A) special needs trusts. This ends the false presumption in American law that all individuals with disabilities lack the mental capacity to handle their own affairs. No longer will individuals in need of a special needs trust, but without parents or grandparents, face undue legal difficulties.
Passage by the House clears way for new ways of creating Special Needs Trusts
On November 30, 2016, the House passed H.R. 34 – 21st Century Cures Act, a major health care package that included the Special Needs Trust (SNT) Fairness Act (Sec. 5007). The health package covers a wide array of issues, including new disease research funding, mental health reform, and combating opioid abuse.
The SNT Fairness Act would allow individuals with disabilities, who have capacity, to set up their own d-4-a special needs trust. Passage of the SNT Fairness Act has been National Academy of Elder Law Attorney’s top public policy priority for this congressional session.
In September, the House passed an amended version of the SNT Fairness Act that contained several additional non-controversial provisions related to Medicaid. A year prior, the Senate unanimously passed the original version of the SNT Fairness Act.
Now, the Senate must take up the health package for the provisions to become law.
Special Needs Trusts are trusts designed to hold assets for the benefit of a disabled individual while allowing that individual to receive and benefit from available government services. There were 2 types of SNT’s: 1. Created with the assets of the disabled individual (so called (D)(4)(a) Trust); and 2. Created with assets other than those of the disabled individual.
The current law limited who could create a SNT with assets of the disabled individual. This new law removes the restrictions as to who can create a SNT for a disabled individual.
Want to learn more about Special Needs Trusts? Contact our office for a no-cost consultation.
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About Mathew J. Leonard ESQ.
Matthew J. Leonard's practice is concentrated in business law, estate and asset protection planning, elder care, civil and probate litigation and real estate. He is a member of the Rhode Island, Massachusetts and Florida bars. He is a frequent lecturer and has authored and spoken on in many occasions through the state.