After falling short in the previous Congress, Reps. Glenn 'GT' Thompson (R-Pa) and Frank Pallone, Jr. (D-NJ) recently introduced the Special Needs Trust Fairness Act of 2015, a bill designed to make it easier for people with special needs to create their own first-party special needs trusts.
The current law governing first-party special needs trusts states that a trust must be created by the beneficiary's parent, grandparent, or guardian or by a court, even if the beneficiary is mentally competent. This forces beneficiaries who need to fund a first-party special needs trust to rely on family members for assistance, or, if they don't have living or capable parents or grandparents, to spend thousands of dollars petitioning courts to establish the trusts.
According to Congressman Pallone, who was quoted in a press release put out by Congressman Thompson's office, "The barriers that currently prohibit an individual from creating a Special Needs Trust, despite having the mental capacity to do so, have no basis in reality and place an undue burden on disabled individuals who are simply trying to make ends meet."
In order to fix this problem, the Special Needs Trust Fairness Act inserts language into the Social Security Act to give individuals with special needs the same right to create a trust as a parent, grandparent, guardian, or court. The two sentence bill makes no other changes to the Social Security Administration's treatment of trusts and it does not alter the requirement that first-party trusts contain payback provisions allowing state Medicaid offices to recoup costs from a trust after the beneficiary's death.
To read the full text of the bill, click here.
© 2016 ElderLawNet, Inc.