SPECIAL NEEDS TRUST FAIRNESS ACT
On Tuesday, December 13, 2016, the President signed into law the Special Needs Trust Fairness Act. What is it? This specific Act fixes an error in existing law that indicated that all individuals with disabilities lacked mental capacity to handle their own affairs. The former law presented an issue, it prevented individuals with disabilities from being permitted to establish their own trusts. For individuals to be allowed to establish a Special Needs Trust, the trust needed to be established by a parent, grandparent, legal guardian, or the court for establishing the trust or establishing a pooled trust.
One of the most common types of trusts is a self-funded trust known as a (d)(4)(A) trust or First-Party Special Needs Trust. Placing assets or funds in a Special Needs Trust simultaneously protects individuals’ eligibility for public benefits. With the new law set in place, capable individuals with disabilities can set up their own special needs trust without having to petition to a court and incur unnecessary costs or time lost under section (d)(4)(A) of the Act. (This does not mean that an individual can self-administer his/her trust.)