The U.S. House just last year passed the Special Needs Trust Fairness and Medicaid Improvement Act (H.R. 670). According to PR Web’s article “NAELA Praises House Passage of Special Needs Trust Fairness and Medicaid Improvement Act”, this “common sense fix” corrected the original law, which assumed disabled people would be incapable of handling their own affairs and need a guardian. The act passed in the House with an overwhelming 382 to 22 vote.
Congress first recognized “D-4-A” Special Needs Trusts in 1993. This type of trust was designed to ensure individuals with disabilities can use their own savings to provide for their any supplemental needs. Most significantly, it means they will still qualify for long-term services and support only eligible to those who pass means-testing, including programs such as Medicaid.
A special needs trust can help families caring for a loved one with special needs or expensive specialized care avoid financial hardships. An oversight in drafting the original law regarding these types of trusts meant individuals with no parent, grandparent or legal guardian needed to petition the court for guardianship. This new bill alleviated some of the effects of that blanket assumption.
“[This] was a major step forward in correcting this long-overdue fix and we look forward to working with the Senate to see the bill signed into law,” said NAELA Pres. Catherine Seal. While the U.S. Senate did pass similar legislation, there was still work to be done in reconciling the two bills. The most significant difference was the House bill’s provision for covering the anticipated $10 million the legislation would cost the government.
Late in 2016, the legislation was added to the 21st Century Cures Act, passed by Congress and signed into law under President Obama on December 13th of last year. However, even with this correction, there’s still always a need for caution and good planning. You should consult an experienced special needs and estate planning attorney to ensure special needs beneficiaries don’t face any surprises down the road, like losing out on long-term government services.
For more information on special needs planning, explore our website and contact us to schedule your consultation today!
References: PR Web (Sept. 20, 2016) “NAELA Praises House Passage of Special Needs Trust Fairness and Medicaid Improvement Act”
Special Needs Alliance (December 13, 2016) “The Special Needs Trust Fairness Act is Law”