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.
DON’T DELAY – CONTACT YOUR CONGRESSIONAL RESPRESENTATIVE TO APPROVE OF THE SNT FAIRNESS ACT TODAY!