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George H. Gray

Special Needs Trust Fairness and Medicaid Improvement Act (HR 670) Amended

House of Representatives Bill Amended on September 20, 2016

A first party supplemental needs trust allows a person with a disability limited access to resources without affecting his or her means-tested government benefits. It allows a person with a disability who has received, for example, an inheritance, an award of back benefits or a personal injury award to enjoy the bounty of the inheritance or award without jeopardizing the receipt or amount of those benefits. First party supplemental needs trusts are quite common and always useful to enrich and enhance the life of a person with a disability.

In a quirk of the Federal Statute, a person with a disability can not establish his or her own first party supplemental needs trust. Instead they must “rely upon the kindness of others:” a parent, a grandparent, a Guardian or a court. We are now well on the way toward a remedy. H.R. 670 “Special Needs Trust Fairness Act of 2015" passed the U.S. House of Representatives on Sep 20, 2016 and goes to the Senate next for consideration. If passed by the Senate and is signed into law by the President, it will add the person with a disability to the lists of persons eligible to establish a first party supplemental needs trust. This means that a mentally competent individual who is disabled may establish his or her own first party supplemental needs trust and will not have to rely upon a parent, grandparent, guardian or a court to accomplish the task.

Our office is monitoring the path of H.R. 670 and will report further on its progress during the legislative track.

View full text of HR 670 - Special Needs Trust Fairness and Medicaid Improvement Act.

 

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