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Disabled Individuals now able to create their own Trusts

On December 13, 2016, President Obama signed H.R. 34, the 21st Century Cures Act, into law.  The bill included the Special Needs Trust Fairness Act (sec. 5007), which corrects an error in the law that had used the false presumption that all persons with disabilities lack the mental capacity to handle their own affairs.

Elder Law Attorneys, through their organization NAELA, applaud Reps. Glenn “GT” Thompson (R-PA) and Frank Pallone (D-NJ) along with Sens. Chuck Grassley (R-IA) and Bill Nelson (D-FL) for their bipartisan dedication to ensuring this common sense fix became law. Previously, the legislation passed the Senate by unanimous consent and overwhelmingly in the House, but with several additional non-related Medicaid provisions.

“D-4-A” special needs trusts were first recognized by Congress in 1993. They help ensure that individuals with disabilities can use what savings they have to provide for their supplemental needs while still qualifying for long-term services and supports from means-tested programs like Medicaid without living in utter destitution.

A misconception in the 1993 trust law meant that individuals who did not have a parent, grandparent, or legal guardian had to petition a local court for the creation of their trust. This in turn led to unnecessary legal fees, time wasted, and administrative confusion. The Special Needs Trust Fairness Act corrects this error by allowing individuals with capacity to set up their own trust. “No longer will individuals in need of a special needs trust, but without parents or grandparents, face undue legal difficulties,” said NAELA President Catherine Anne Seal, CELA, CAP.