By Saundra M. Gumerove, Esq.

Last week the United States Senate unanimously approved the Special Needs Trust Fairness Act of 2015 (the Act). While this is a great step forward to giving disabled people receiving supplemental security income (SSI) and Medicaid the ability to create special needs trusts themselves, it is imperative that everyone contact their Congressional representative to prevent this Act from dying in the House of Representatives.

What is a Special Needs Trust?

A special needs or supplemental needs trust (SNT) is a fund for the benefit of a person with a disability (the beneficiary). An SNT is a way for monies to be set-aside for a person with a disability without affecting their eligibility for government benefits. Currently, persons receiving government benefits cannot have over $2,000 in their name without losing their benefits.

There are two types of SNTs: first-party and third-party. A first-party SNT is created with money owned by the beneficiary. A parent, grandparent, legal guardian, or court must create a first-party SNT. Any money remaining in the first-party SNT at the death of the beneficiary goes to Medicaid to repay Medicaid for services received over the beneficiary’s lifetime. A third-party SNT may be created with funds from a family member or friend of the beneficiary (a “third” party). At the death of the beneficiary, the remainder funds may go to anyone the person who created the trust chooses.

SNTs are important because they give people receiving government benefits money for things that SSI and Medicaid will not pay for, such as vacations or entertainment

What is the Special Needs Trust Fairness Act of 2015?

The Act, if enacted by each state, will allow competent people with disabilities who are receiving government benefits to create first-party special needs trusts without having to ask a parent, grandparent, legal guardian, or court for permission. Currently, no matter his or her competence, any disabled person who wants to create a first-party special needs trust must have approval of a parent, grandparent, legal guardian, or the court.

Why is it important to contact your Congress representative and encourage them to approve this Act?

The Act amends the Social Security Administration provision that requires help from a disabled persons’ parent, grandparent, legal guardian, or the court to create a first-party SNT. This Act will greatly reduce the cost and difficulty of establishing a first-party SNT.


By Saundra M. Gumerove, Esq. & Josh Hecht, Esq.

As divorce attorneys, sometimes we don’t know what we don’t know

Our Clients can sign the agreement, which has all of the traditional language. We may think we provided for each and every need of the child- their basic support, add-on activities, extra-curricular programs, perhaps a special school- but the question remains: What must we also consider when planning for a child with special needs?

The old adage that “an ounce of prevention is worth a pound of cure” rings particularly true when drafting provisions for a child with special needs. The key is to address problems before they materialize.

It is important to recognize that, either during childhood or upon reaching the age of 18, children with disabilities may become eligible for government benefits such as Supplemental Security Income (SSI) and Medicaid. A common pitfall not known to many practitioners is the fact that these programs have income and resource limitations – which means that the child who stands to receive these benefits cannot have more than $2,000.00 in his or her name.

The practitioner must also consider the fact that child support under Social Security regulations is income that is imputed to the child. If a parent of 2 children receives $1,000 a month in child support, the entire $1,000 is deemed to be income of the disabled child, disqualifying them for SSI and Medicaid.

There is a two-pronged solution that will satisfy federal and New York State law – first, a Court must allocate child support among the children. Second, the Court must order the child support allocated to the child with special needs to be deposited into a supplemental needs trust for the benefit of that child. This will ensure that the child with special needs will maintain eligibility for government benefits.

The beauty of a properly drafted supplemental needs trust is that it allows you to provide for the needs of your child while ensuring that they qualify for government benefits without regard to the balance of funds in the trust.

While the parting couple often does not agree on much, what they typically do agree on is that their children should be provided for, particularly children with special needs, in the years and decades to come. A thoughtfully drafted agreement will ensure that those needs are met long after pen has been put to paper on the agreement.

This blog was originally posted on the Sunshine, Isaacson & Hecht,LLP blog and is co-authored with Joshua B. Hecht. It is reprinted here with permission.

By Saundra M. Gumerove, Esq.

A person is considered a competent adult upon reaching the age of 18 unless a Court has determined otherwise. A parent loses the right to make decisions for a child with a disability, whether it is a developmental, mental, or physical disability, once a child turns 18.

By Saundra M. Gumerove, Esq.

A Supplemental Needs Trust or Special Needs Trust is designed to hold assets for an individual who receives government benefits such as Supplemental Security Income or Medicaid. Typically, in order to qualify for these government benefits, you must qualify and have limited assets and income.

A Supplemental Needs Trust or Special Needs Trust can hold assets in almost any amount and the assets will not be counted or considered assets of the person receiving the government benefits. The funds in the trust are intended to be used to “supplement, but not supplant” government benefits. Thus the assets are intended to be used for almost anything except food, shelter and medical benefits paid for by government benefits.

By Saundra M. Gumerove, Esq.

There are two types of supplemental needs trusts:

  1. Third Party Supplemental Needs Trust can be created by anyone except the individual with disabilities. The funds deposited into the trust come from someone other than the individual with disabilities.  The grantor or creator of this type of trust can designate who receives the balance of the funds in this trust upon the death of the beneficiary.
  2. First Party Supplement Needs Trust or Medicaid Payback Supplemental Needs Trust is funded with assets owned by the individual with disabilities. Most often these funds are the proceeds of a medical malpractice or personal injury lawsuit. This type of trust can only be established by a parent, grandparent, legal guardian or court. Medicaid is reimbursed for all the funds expended on behalf of the individual with disabilities upon the death of the beneficiary.