The Special Needs Trust Fairness Act of 2015 ( S-349) would correct an error in OBRA ’93, which was a major revision to the Medicaid Act that allowed Medicaid applicants or recipients under age 65 to make penalty-free transfers of their assets or income into a first-party Special Needs Trust for their sole benefit. To qualify for the exemption, the Trust had to be established by a parent, grandparent, guardian or court.
This created a problem for a person who is disabled but is not incapacitated and has no guardian, whose parents and grandparents are either deceased or uninvolved. A person in this circumstance would have to file a petition in the chancery court to create the Special Needs Trust for them. We have certainly done that many times over the years. But it seems unfair and should be unnecessary.
S-349 solves this problem. There’s no logical reason to oppose the bill. The individual would be able to select a trustee and hire their own attorney to write and establish the trust, assist with the process to get the assets transferred into the trust, and assist and advise them with regard to their rights and the trustee’s responsibilities. It could all be done much quicker, as court proceedings often get bogged down and delayed. It would also preserve the privacy and self-determination of the individual, which could be especially important if there is any hostility or dissension in the family.
We have been seeing a steady movement toward supporting the autonomy of people with disabilities. This Act should be supported as yet another step in that direction. The Act was passed in the Senate and now needs to be approved by the House of Representatives. To encourage your Congressperson in the House to co-sponsor or support the bill, contact them via email. You can find them all here.
For legal assistance with creation and administration of Special Needs Trusts, call us at … 732-382-6070