Law Office of John S. Palmer Attorney at Law

Special Needs Trust Fairness Act

Posted Friday, November 29, 2013 by John S. Palmer

On November 7, a bill was introduced in the U.S. Senate that would allow disabled individuals to establish their own Special Needs Trusts. The bill is identical to one introduced in the House last June.

Assets in a Special Needs Trust are disregarded when determining the trust beneficiary’s eligibility for asset-sensitive government programs such as SSI and Medicaid. However, current federal law prohibits a disabled individual from establishing his or her own trust; rather, the law requires that the trust be created by a parent, grandparent, guardian, or by court order on the beneficiary’s behalf if it is to be funded with assets belonging to the beneficiary.

The legislation is strongly endorsed by the National Academy of Elder Law Attorneys, or NAELA, which has issued a press release stating that the “current law is based on an incorrect assumption that a person with disabilities lacks the mental capacity” to create a trust, thereby placing an undue burden on such individuals.

NAELA has posted various documents on its website pertaining to the legislation, including the text of both the House and Senate bills as well as letters of support from Easter Seals, the American Association of People with Disabilities, the Academy of Special Needs Planners and the United Spinal Association.

Both the Senate and House bills have been referred to committee. However, www.govtrack.us currently predicts that the Senate bill has a 5% chance of getting past committee and 2% chance of being enacted; somewhat inexplicably, it gives the identical House bill a 10% chance of being enacted.

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.