Congress will soon vote on passing the Special Needs Trust, Fairness Act of 2015, a bill designed to make it easier for people with special needs to create their own Special Needs Trust. A Special Needs Trust is used to enable a disabled individual to hold assets in a trust for his or her benefit by supplementing daily living expenses without making the disabled person ineligible for government benefits.
Under the current law, a Special Needs Trust must be created by the beneficiary’s guardian, parent, grandparent, or by the court even when the beneficiary is mentally competent. This forces someone that needs to fund a special needs trust to rely on family members for assistance, or to spend thousands of dollars to petition a court to establish the trust.
According to Congressman Frank Pallone, Jr., the act is needed because the current barriers that prohibit an individual from creating a special needs trust, despite having the mental capability to do so, have no basis in today’s world and place an undue burden on disabled people. The Special Needs Trust Fairness Act aims to insert language in the Social Security Act to give individuals with special needs the same right to create the trust as a parent, grandparent or the court.
The proponents of the bill note it would only add two sentences and make no further changes to the Social Security Administration’s treatment of trusts. The proposed act would also not alter the requirement that first party trusts contain payback provisions to allow state Medicaid to recoup costs from a trust after the beneficiary’s death. The congressmen that presented the bill hope the act will empower those persons with disabilities to take charge of their own lives by breaking down the current barriers.
Special Needs Trusts are a great estate-planning tool that is designed to enhance the quality of life for a person with a disability by maximizing the resources available to a disabled person. A Special Needs Trust is great because it allows a trust to provide for health care costs while also preserving eligibility for Supplementary Security Income and Medicaid. A Special Needs Trust is also great for a person with a disability that does not qualify for government assistance.
A Special Needs Trust also comes with some unobvious benefits, such as the ability to terminate the help once the support is no longer needed. Diseases and disabilities are being cured every day, and new treatments and technologies may eliminate the need of a Special Needs Trust. This is a good thing because it a Special Needs Trust can be terminated so that a person’s inheritance is not needlessly tied up.
For more information on the benefits of a Special Needs Trust, and how the current trust laws are changing, contact the Law Office of David M. Goldman PLLC today.