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Special Needs Trust Fairness Act Moves Forward

Posted on: July 30th, 2015
special needs trust lawsEarlier this year, the Special Needs Trust Fairness Act of 2015 (H.R. 670) was proposed to provide disabled persons with legal capacity the freedom to create Special Needs Trusts for their own benefit. Under the current law, a special needs trust must be created by the disabled person’s parents, guardian, or by a court order – regardless of the disabled person’s competency. Disabled persons are currently at a disadvantage if they do not have parents or a guardian, or if the parent or guardian will not create the trust on the person’s behalf. Obtaining a court order is costly and time consuming, and imposes an unnecessary burden on the disabled. The Act, if passed, would simply eliminate the requirement that the parent, guardian, or court create the trust for the disabled person, and apply to all trusts created on or after the date of the Act. 

Figures from the Annual Disability Status Report, developed from the United States Census Bureau, show that more than 1.3 million people in North Carolina are affected by a disability and likely rely on Medicaid, Social Security, or other government benefits. As of 2013, approximately 13.7% of all North Carolina residents live with a disability and about 76% of (non-institutionalized) disabled persons between the ages of 21-64 were unemployed.  

Special Needs Trusts can be funded with assets that will remain available for the benefit of the special needs person, without disqualifying them from public benefit programs. An individual must not have more than $2,000 in ‘countable resources’ in order to qualify for Medicaid, in addition to monthly income limitations.  The assets in the trust can provide supplemental care that is needed, but not provided by public benefits programs. Learn more about the North Carolina Medicaid income limits from the N.C. Department of Health and Human Services. 

Our Special Needs Trust attorneys work with disabled individuals to create and administer special needs trusts. Contact us if you would like more information on public benefits planning and special needs trusts. To learn if the Special Needs Trust Fairness Act of 2015 passes into law, follow our North Carolina Special Needs Trust attorneys on Twitter @estateplansnc and Facebook.

By Attorney Katie Muhlenkamp
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