The Special Needs Trust Fairness Act is proposed federal legislation that, if passed and signed into law, would allow individuals to set up their own special needs trusts without the need of a third party. A Special Needs Trust, or SNT, is a trust that allows a disabled individual the ability to hold assets and receive income while still maintaining eligibility for need-based government benefits, such as Medicaid and Supplemental Security Income.
Under current law, a SNT can only be established “by a parent, grandparent, legal guardian of the individual, or a court”. A problem with this formulation is that it presumes that the beneficiary of the trust lacks the mental capacity to establish a trust. Just because someone has a physical disability that qualifies them for benefits does not mean that their mental capacity has also been diminished. Another problem with requiring someone else to establish the trust is that if the beneficiary of the trust does not have a parent or grandparent who can establish a trust, getting the trust established by a court can involve a significant amount of unnecessary time, added paperwork, and court fees. Additionally, having a court establish a trust can be especially problematic in understaffed and/or rural court systems where public officials have little experience with SNTs. The Special Needs Trust Fairness Act would fix these problems by making individual beneficiaries eligible to establish trusts themselves without having to burden themselves and the court system with needless delays and costs.
The Special Needs Trust Fairness Act passed the Senate by unanimous consent last year and is currently in committee in the House of Representatives. The bill, known as HR 670 in the House, is primarily sponsored by Rep. Glenn Thompson (R-PA) and has a bipartisan group of 25 co-sponsors. The bill is supported by NAELA, the National Academy of Elder Law Attorneys. If you are interested in learning more about the bill or contacting your representative, please visit the following website for more information: http://cqrcengage.com/naela/sntfa