Tag Archive for: Special Needs Trusts


The Special Needs Trust Fairness Act is Reintroduced in the House and Senate

The Special Needs Trust Fairness Act of 2015 was introduced into the U.S. House (H.R. 670) by Representatives Glenn “GT” Thompson (R-PA) and Frank Pallone (D-NJ). It was also introduced into the Senate (S. 349) by Senators Chuck Grassley (R-IA) and Bill Nelson (D-FL). A previous version of the bill, The Special Needs Trust Fairness Act of 2013, failed to become law in the previous session of Congress.

Special needs trusts (SNTs), also called a supplemental trust, were established by Congress in 1993 to help individuals with disabilities remain eligible for means-tested government benefit programs like Medicaid, even if they get a cash insurance settlement or an inheritance, etc. that would otherwise disqualify them from these means-tested programs. The general rule is that the SNT cannot pay for food, clothing or shelter because Social Security Income is designed to pay for that. However, the SNT can pay for “supplemental needs” like: physical therapy, medications, medical treatment, transportation, education, furniture, etc. Also, no direct payments to the beneficiary are allowed.

Also under current law, an SNT can only be established by a parent, grandparent, legal guardian or court. Supporters of the Special Needs Trust Fairness Act of 2015 hope to change that by adding the words “the individual” to the beginning of that list.

Supporters of this bill say that individuals with disabilities should be allowed to establish their own SNT if they are otherwise competent and capable of doing so. In a case where the individual has no parent, grandparent or guardian, it is an undo hardship to have to petition a court and an undue burden on the court system. Also, supporters argue that this bill corrects an almost certain oversight when the law was drafted.

Supporters of the bill include: the National Council of Elder Law Attorneys (NEALA), the Academy of Special Needs Planners (ASNP) and the American Association of People with Disabilities (AAPD).

Mark Perriello, the President and CEO of the American Association of People with Disabilities (AAPD), the nations largest disability rights organization, endorses the bill, saying, “The AAPD strongly supports the SNT Fairness Act of 2015 because the legislation eliminates discrimination against people with disabilities in creating special needs trusts and therefore promotes our self-sufficiency and independence”.

Click here to view H.R. 670
Click here to view the press release from Congressman Glenn Thompson


Coordinating the Use of Special Needs Trusts and Medicare Set-Asides to Protect Government Benefits

Today, the Medivest Blog presents a guest post from Stephen W. Dale, Esq., LL.M.:

Steve Dale here, from The Dale Law Firm, PC in Pacheco, CA. My practice specializes in Estate Planning for families with special needs. In many of our cases we deal with personal injury settlements. A large portion of those clients receive government support, such as SSI, SSDI, Medicare and Medicaid and therefore both Special Needs Trusts (SNTs) and Medicare Set-Asides (MSAs) are a consideration.

The Relationship between SNTs and MSAs. It is our role to help our families to protect those benefits by setting up a system of support that addresses both their immediate and long term needs in a way that adheres to the complex rules and restrictions of federal, state and local regulations and to advise them on changes in funding and regulations. We also work to help our clients understand and address MSAs. These actions are especially important in today’s atmosphere of budget cuts and benefits reductions.

Protecting Benefits:  Part of the duties of an estate planning attorney when working with settlement awards is to look at what kind of benefits are essential for that particular plaintiff. If maintaining needs based benefits such as SSI, Medicaid and In-Home Support Services (IHSS) are essential, then, in all likelihood, a SNT is needed. In addition, if the plaintiff also needs to protect their Medicare benefits then an MSA is needed and the MSA needs to be placed inside the self-settled SNT.

Administration:  Where as an MSA can generally be self-administered, it cannot be self-administered if it is inside a special needs trust.  For the plaintiff that is trying to preserve their needs based benefits self-administration would cause the funds to be considered a resource. Because of the complex rules in the administration of an MSA it is absolutely essential to have an MSA administrator who is experienced and committed to keeping up with the law. It creates a situation where you have two tiers of rules that you must pay attention to.  First, what is appropriate to protect Medicare’s interest and second, how you can accomplish that without the distributions becoming an income or resource for these needs based benefits.

While many trustees of special needs trusts are very familiar with making distributions in a manner that preserves needs based benefits, few are familiar with the distribution specifics that Medicare pays for. Medivest provides the structure and knowledge base that fulfills those needs and we utilize them often.


SSI, Medicaid and SNTs

Today, we continue from where we left off in our previous blog with a look at SSI, Medicaid and SNTs. These three programs are also related to each other in a similar fashion as the three programs explained in the previous blog.

Social Security Income (SSI) is a federal welfare program funded by general tax revenues (not payroll taxes) which makes monthly payments to people who have low income, few assets and are age 65 or older, blind or disabled. The maximum monthly benefit is $674 in 2009.

Medicaid is a government health program that pays medical bills for certain categories of low-income individuals with few assets, including; children, pregnant women, parents of eligible children, and people with disabilities. It is funded jointly by the federal government and the states, but administered by each state individually. Medicaid benefits are automatically provided to SSI recipients in most states.

A Special Needs Trust (SNT) is a trust set up to provide for a disabled individuals extra and supplemental needs, other than basic food, shelter and health care expenses that may be covered by public assistance benefits that the beneficiary may be entitled to receive under various programs such as Supplemental Security Income and Medicaid. Assets in an SNT will not be counted by “means tested” programs like SSI and Medicaid. The SNT therefore protects the beneficiary’s access to these government programs.

The way these three programs relate to each other is similar to the three programs in the previous blog. If a person is on SSI, then he/she is automatically enrolled in Medicaid. Then, if that person is injured and receives insurance settlement monies, it often times will be put into a SNT to protect that persons eligibility to participate in SSI and Medicaid.

Medivest specializes in the area of Medicare Set Asides and we can assist you in referrals to Elder law attorneys and/or Social Security attorneys, if expert assistance in the other programs is needed.