Special Needs Trust Fairness Act

Congress passed the Special Needs Trust Fairness Act as a provision of the 21st Century Cures Act. This new law cured a decades old injustice toward special needs adults. In 1993, Congress enacted laws allowing a parent, grandparent, guardian, or court to establish a Special Needs Trust. These trusts could then be funded with the assets of a special needs adult who is under 65 years of age. The assets in the trust are exempted from consideration in determining Medicaid and SSI eligibility provided that the trust provides only those items to the beneficiary not otherwise available through governmental assistance programs. The trust must provide reimbursement to the state department of medical assistance for the total amount of medical assistance paid on behalf of the beneficiary during her lifetime upon her death. 42 U.S.C. 1396p(d)(4)(A).

However, Congress did not allow anyone to establish his or her own Special Needs Trust. Special needs adults who do not have parents or grandparents to establish the trust for them were forced to petition the local court for permission for another friend or family member to establish the trust on their behalf. This cumbersome court proceeding costs special needs adults money and time which could have been better spent.

In December, the Special Needs Trust Fairness Act fixed this oversight. The Act empowers special needs adults to establish their own Special Needs Trusts. The passage of the Special Needs Trust Fairness Act removes the costly legal barrier for people who do not have parents or grandparents to create their trust. The Social Security Administration issued a new regulation to allow trusts that were establish by special needs adults for their own benefit as of January 1, 2017. The Georgia Department of Community Health is also approving trusts that have been established by the beneficiaries.

We are excited to have had a client sign her own Special Needs Trust last week. She had been waiting for over 2 months for the local superior court to decide upon her petition. Her wait is over as is the wait for thousands of other special needs adults.