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Special Needs Trust Fairness Act: One Step Away From Making History

On July 13th, Congress took another critical step toward furthering the rights of individuals with disabilities. 

Members of a committee within the House of Representatives voted to pass the Special Needs Trust Fairness Act—a bill that would allow individuals with disabilities to establish their own special needs trusts (known as first-party special needs trusts).

We know what you’re thinking—don’t individuals with disabilities already have the right to create their own special needs trusts?

Surprisingly, the answer is no.  Why not?, you may ask.  The reason is quite shocking.

Back in 1993 when Congress wrote the law allowing individuals to establish special needs trusts, it made a typo!  The law states that a parent, grandparent, guardian or court can establish a first-party special needs trust.

Congress forgot two small—but very powerful words—when stating who could create the trust:  “the individual.”

For decades, this “minor error” has carried a major negative impact for individuals with disabilities, who cannot establish a trust that is designed to hold their own money, and to be used for their sole benefit.  These trusts are of the highest importance, because they allow individuals with disabilities to save private funds while still qualifying for public supports and services.

As a result of this typo, individuals with disabilities have been forced to rely on parents, guardians and conservators, or courts to establish special needs trusts on their behalf, which is time-consuming, frustrating, and expensive.

After twenty-three years and counting, Congress is closer than ever to correcting this error.  Now that the Act has been voted out of the House Committee, the House of Representatives must vote to pass the bill.  Since the Senate has already passed an identical bill, it appears that if the House of Representatives passes the Act, it will become the law of the land.

We are keeping a close eye on the journey of this bill, and can’t wait to report when it crosses the finish line!

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What is a Third Party Special Needs Trust?

 

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