Law Office of John S. Palmer Attorney at Law

Special Needs Trust Fairness Act of 2015

Posted Thursday, September 22, 2016 by John S. Palmer

It looks like the Special Needs Trust Fairness Act of 2015 may pass after all. HR 670 passed in the House on September 20, 2016, and as of today govtrack.us gives it a 56% chance of being enacted; it was previously given just a 1% chance of becoming law shortly after it was introduced in February 2015.

The bill would amend the manner in which a special needs trust may be established for a disabled person. Current federal law provides that if the trust is to be funded with the disabled person’s assets, it may only be created by the disabled person’s parent, grandparent, guardian, or the court. HR 670 would permit such trusts to also be created directly by the disabled beneficiary.

The law most likely precluded disabled persons from creating their own trust to avoid disputes over the trust’s validity, particularly where the disabled person may have cognitive issues or be susceptible to undue influence. Over time, a segment of the elder law community—and some members of Congress—have come to believe that forcing disabled persons to rely on others to create so called “self-settled” special needs trusts unfairly increases the cost of establishing them.

The National Academy of Elder Law Attorneys supports the bill and has set up a webpage to track its progress.

If you have any questions or would like to schedule an appointment, please call us at (425) 455-5513, toll free at (877) 455-5513, or info@palmerlegal.com.