Disabled Individuals May Now Create Their Own Special Needs Trusts
02 Aug 2017
Until last December, a person who wanted to create a special needs trust with their own funds couldn’t set it up themselves. Instead they had to have the trust created by a parent, grandparent, guardian, or court. Too often with disabled adults, a parent or grandparent were not available, and court action would have to be instituted to create the trust.
Special Needs Trust Fairness Act
The federal “Special Needs Trust Fairness Act,” enacted December 13th 2016, amended the law to allow the individual themselves to create such a trust. Now a disabled beneficiary may create a self-settled special needs trust to hold their own assets, and prevent them from being counted by Medicaid or several other public benefits programs.
This trust is only available to those persons who are disabled and are under 65 years of age. Once a beneficiary reaches 65, no new assets can be placed in this type of trust, however all assets already in the trust continue to be protected. The trust must include a provision that the cost of Medicaid services actually paid on the individual’s behalf will be paid back to the State at the individual’s death.
Ohio has recently announced new regulations that brings Ohio into compliance with this law. The new law makes the creation of this type of asset protection trust easier for many clients.
If you have any questions regarding special needs trusts please contact Todd Bartimole, Cavitch shareholder and attorney practicing in the areas of Elder Law, Estate Planning and Disability and Special Needs Planning.
Tags: Disability and Special Needs Planning, Elder Law