PASSAGE OF SPECIAL NEEDS TRUST FAIRNESS ACT

On December 7, 2016, the Senate passed H.R. 34, the 21st Century Cures Act. The legislation will now go to the President for signature to which he has stated he will sign. H.R. 34 included the Special Needs Trust Fairness Act, which changes the law to presume disabled individuals have capacity.

A special needs trust ensures that individuals with disabilities can provide for their supplemental needs but still meet the standards of means based government programs like Medi-Cal. For example, a medi-cal recipient does not have to be disqualified for receiving a personal injury settlement. The settlement proceeds can go into a special needs trust to provide for supplemental needs.

The creation of the special needs trust was first recognized by Congress in 1993. However, the current law does not allow a disabled individual to create their own special needs trust without going to court for confirmation unless they have a living parent, grandparent, or legal guardian who can create the trust for them. This resulted in an undue burden for individuals without parents, grandparents or a legal guardian. The new law will allow disabled individuals with capacity to create their own special needs trust and save thousands in legal fees.