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Vermont Estate Planning Blog

Thursday, May 18, 2017

Elder Law: SNT Fairness Act

With the recent passage of the Special Needs Trust Fairness Act (effective December 13, 2016), disabled individuals with mental capacity can now create their own special needs trust.  Special needs trusts are often necessary in order to preserve asset-eligibility for government benefits, primarily Medicaid and Supplemental Security Income (SSI), when a disabled beneficiary receives money from a gift, inheritance, settlement, or other source.  The general purpose of these trusts is to supplement public benefits, ensuring excess funds for that individual to use over the course of his or her lifetime.

Prior to the passage of this law, individuals with disabilities had to rely upon a parent, grandparent, or Court-appointed guardian to establish such a trust funded with their own monies.  In many situations, there was no such individual already available, thereby creating the necessity to petition the Court  for the sole purpose of creating the special needs trust.  For many beneficiaries, this involved unnecessary delays and costs.

The SNT Fairness Act corrects what many believe was technical error in the Omnibus Budget Reconciliation Act of 1993 (OBRA-93), which failed to include “individual” in the class of persons eligible to create the special needs trust.

 






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