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Special Needs Trust Fairness Act

On Behalf of | Dec 22, 2016 | Firm News, Uncategorized |


On Tuesday, December 13, 2016, President Obama signed H.R. 34, named the “21st Century Cures Act,” into law. Embedded in this legislation is the culmination of many years of work by Elder Law attorneys across the country to effectively amend the federal statute allowing for the establishment of self-settled special needs trusts for disabled individuals (otherwise known

as 42 U.S.C. §1396p(d)(4)(A)). Section 5007 of this act had been independently lobbied in Congress as a separate bill entitled the “SNT Fairness Act” before it was included as a provision in this particular legislation.

The change to the federal statute is relatively simple – the words, “the individual” were added to the statutory language. This small, yet powerful change now effectively enables competent, disabled Americans who are under 65 to independently establish and fund special needs trusts. As a result, individuals who qualify will be able to protect their assets from Medicaid and SSI consideration without the need for a parent, grandparent, legal guardian or a court to establish the trust on their behalf. Prior to this legislation, the statute required a proxy to establish this particular trust, regardless of an individual’s capacity. Such requirement often led to significant delays and costly court intervention merely to establish a self-settled special needs trust for individuals. This impediment for many competent individuals is now removed.

The statutory language indicates that the change to federal law is in effect immediately upon enactment so any disabled individuals who are capable of setting up such a trust should have access to this option. We are not sure how it will be implemented in Texas but hopefully it will bring some hope for those who need these trusts.

By Toby Cole.