Important Legislation Regarding Special Needs Trusts

For Immediate Release

November 8, 2013

Contact: Abby Matienzo, Communications Associate

NAELA Commends Senators Nelson, Grassley, Rockefeller, and Enzi for Their Dedication to Improve the Lives of People with Disabilities With the Special Needs Trust Fairness Act

 The National Academy of Elder Law Attorneys (NAELA) strongly endorsed the introduction of the Special Needs Trust Fairness Act by Sens. Bill Nelson (D-FL), Chuck Grassley (R-IA), Jay Rockefeller (D-WV), and Mike Enzi (R-WY) (S.B. 1672). The bill addresses a problem facing many capable persons with disabilities: the inability to create their own special needs trust (SNT). Under the current law, a parent, grandparent, legal guardian of the individual, or a court must establish the SNT. The Special Needs Trust Fairness Act will help empower people with disabilities to be responsible for their life decisions. The House companion is H.R. 2123, introduced by Reps. Glenn Thompson (R-5th-PA) and Frank Pallone (D-6th-NJ).

The current law is based on an incorrect assumption that a person with disabilities lacks the mental capacity to enter into a contract. The disparity in the law creates a fairness and disability rights issue. In 1993, Congress recognized the use of SNTs in the Omnibus Budget Reconciliation Act of 1993 (OBRA 1993). SNTs allow assets to be held in a trust to supplement daily living expenses when government benefits alone are insufficient, thus protecting the individual against the risk of complete impoverishment. However, the law stipulates that a SNT can only be created by a parent, grandparent, legal guardian of the individual, or the court.

“The Special Needs Trust Fairness Act is a common-sense solution that will save individuals with disabilities from unnecessary legal costs and time spent in petitioning the courts and gives them back their dignity and constitutional right,” stated NAELA Board Member Michael Amoruso, Esq.

He continued: “Without this bill, I, a blind and moderately deaf attorney who regularly drafts SNTs for clients, would not be able to sign my own SNT in the future.”

NAELA President Howard S. Krooks, CELA, CAP, calls upon Congress to “make this important and cost-neutral change to USC§1396p (d)(4)(A) that will allow individuals to create their own special needs trusts by inserting the phrase ‘the individual’ into the statute so that people with disabilities can enjoy the dignity they deserve and remove the misplaced presumption that they lack capacity due to their disabilities.”

Other groups support this proposal, including Easter Seals and the American Association of People with Disabilities.