McCall Stern PLLC

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SPECIAL NEEDS TRUST

On December 7, 2016, the Senate approved the 21st Century Cures Act (H.B. 34) that is expected to be signed into law by President Obama shortly. Significant to all estate planners with disabled clients, this legislation includes the Special Needs Trust Fairness Act, which finally rights what has long been considered an error in prior law regarding establishment of First-Party Special Needs Trusts for disabled individuals with mental capacity.

The Special Needs Trust Fairness Act makes a simple modification to 42 U.S.C. 1396p(d)(4)(A) which allows an individual to establish his or her own first-party special needs trust. This small change has big consequences. Disabled beneficiaries with mental capacity to establish their own trust no longer need to seek the assistance of their parents, grandparents, guardians, or the court. They may now act on their own behalf to establish a first-party special needs trust and fund it with their own assets, without any undue legal difficulties.