The 21st Century Cures Act, which includes the Special Needs Trust Fairness Act has passed both the House and Senate and was signed by President Obama on December 13, 2016.  Individuals with disabilities, who have capacity, can create their own first party special needs trusts (sometimes called (d)(4)(A) trusts as they are established under 42 U.S.C. s. 1396p(d)(4)(A)). The federal statute prior to this legislation only allowed a special needs trust to be established for a person with a disability by the person’s parent, grandparent, guardian, or by a court.

The individual that would benefit the most from the trust, the beneficiary, however could not establish the trust themselves. The law as it was written presumed that all individuals with disabilities lack the mental capacity to establish a trust. The Special Needs Trust Fairness Act will end this presumption. No longer will individuals in need of a special needs trust, but without parents or grandparents, face undue legal difficulties.

The assets held within a special needs trust are considered to be non-countable for purposes of eligibility for means-tested public benefits, including Supplemental Security Income and Medicaid. The Special Needs Trust Fairness Act, along with the recent ABLE account, give individuals more options to managing their own financial affairs.

Please click here for our post on the Achieving a Better Life Experience Act, or ABLE account.