Special Needs Trust Fairness Act
Estate Planning and Elder Law Articles
As many of you know, Michael J. Amoruso, Esq. was the leading advocate of the Special Needs Trust Fairness Act well before he brought the issue to the National Academy of Elder Law Attorneys (“NAELA”) to actively draft, support and push for its introduction and passage in Congress as current NAELA Vice President and Past Chair of NAELA’s Public Policy Committee. “Today I am honored to be NAELA’s representative at the White House to witness President Obama sign the Cures Act that contains the Special Needs Trust Fairness Act! It has been a long 23 year effort to correct a mistaken presumption in Federal law that anyone with a disability lacks the mental capacity to plan their own affairs,” Amoruso stated. “Standing in the White House today with my Seeing Eye Dog, Demitri, I am proud to know that with fortitude and perseverance, all Americans are empowered to make a positive change,” Amoruso said.
Background
In 1993, Congress added a concept called a “Special Needs Trust” to the Omnibus Budget Reconciliation Act of 1993 (“OBRA 1993”). This addition permitted a disabled individual under the age of sixty-five, who might rely on Medicaid for health benefits and/or Supplemental Security Income to survive, to have a trust established to hold his or her savings in order to have supplemental funds to pay for daily living needs that government benefits did not cover. The quid pro quo for such protection was that, at the disabled individual’s death, the State would be reimbursed from the trust assets for Medicaid benefits paid to the individual during lifetime.The problem, now solved by the Special Needs Trust Fairness Act, was that the Federal law required the trust be established by a parent, grandparent, legal guardian of the individual or a court. Who was missing from that list? That’s correct…. the individuals themselves. “The Special Needs Trust Fairness Act rightfully adds “the individual” onto the list of those eligible to establish the trust – their constitutional right,” Amoruso explained. Prior to the passage of the Special Needs Trust Fairness Act , that person’s sole option (with no parent or grandparent available) was to hire a lawyer to petition the court to create the trust, thereby significantly increasing the cost and time required to create the trust.
What does this mean to you?
If you have a disability
Act now! If you are under the age of 65, you now can sign your own Special Needs Trust and plan for your own affairs like every other American! No longer do you need to ask your parents, grandparents or a Court to allow you to plan for yourself. Unlike an ABLE Account which is limited to $100,000, a Special Needs Trust can hold unlimited assets for you to supplement living expenses without losing lifeline government benefits such as SSI and Medicaid. A real opportunity exists to enhance your quality of life when a Special Needs Trust is used in conjunction with an ABLE Account.
If you are a financial advisor
No longer do your clients need to spend down their assets or engage in costly legal proceedings to qualify for needed government benefits if they no longer have a parent or grandparent alive. You can simply refer them to a qualified attorney to prepare a self settled Special Needs Trust. In this way, you can maintain the financial plan and investment portfolio you already have in place to maximize the individual’s quality of life and your all important client relationship remains intact.
If you are a caregiver, care manager, social worker or other caring professional
You now have the ability to quickly empower your client to keep control of their lives. The plan you put in place for your clients can be implemented much faster and at less cost now that they can take action themselves.
“The long struggle to ensure that folks like me can finally act for themselves like any American with capacity is finally over. The demoralizing stigma that I am incapacitated because I am disabled has finally been corrected and removed by Congress and the President. Today, I am especially proud to be an American” Amoruso declared.
