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Special Needs Trust Fairness Act

Walter’s Story

Walter relies on a wheelchair due to his physical disability but has full mental capacity and the ability to make his own financial decisions.  To ensure that he is protected financially, Walter wanted to set up a Special Needs Trust (SNT).  However, until recently, Walter was unable to do so because the law required that an SNT could only be established by the family member or guardian of a person with special needs. The only child of parents who had passed years ago, Walter was left without a way to establish an SNT and feared for the security of his financial future.

The Special Needs Trust Fairness Act

On December 13, 2016, President Obama signed the 21st Century Cures Act which contains the “Fairness in Medicaid Supplemental Needs Trust”.  The Special Needs Trust Fairness Act was designed to make it easier for people with disabilities to protect their assets.  As a result, individuals who are mentally capable of doing so, are now able to set up their own SNTs without having to rely on a family member or guardian.  

Before the Special Needs Trust Fairness Act, people with disabilities could have a trust set up for them that would supplement the public benefits they were eligible to receive.  But those without family or an appointed guardian, like Walter, were at risk of losing their public benefits if they received other funds from a personal injury, inheritance or otherwise.  As a consequence, and contrary to the goal of maximizing the independence of people with special needs, disabled individuals who did not have a living parent or guardian were forced to spend time and money to establish a court-approved trust through a guardianship proceeding.

Moving Forward

Today, thanks to the Special Needs Trust Fairness Act, anyone with the mental capacity to make their own financial decisions can establish their own Special Needs Trust.  To facilitate this change, Social Security caseworkers have received emergency provisions in order to permit individuals to establish their own trusts.

The Special Needs Trust Fairness Act was a welcome change for Walter and carries great consequence for all Americans with disabilities who have had to face this challenge.  It also impacts how we, as estate planning attorneys, will advise our clients moving forward.

To discuss your specific needs and find out how our special needs trusts attorneys can help you, please call us at Fingeret Law at 412-254-8533 or contact us online.