Bill Would Increase Access To Special Needs Trusts
Legislation approved by the U.S. Senate this week may soon make it easier for people with disabilities to save money.
The bill known as the Special Needs Trust Fairness Act would allow individuals with disabilities to establish a special needs trust for themselves. Under current law, such trusts must be created by a parent, grandparent, legal guardian or a court.
“Those who want and need to set up a trust to help pay for their care shouldn’t have to jump through hoops to do it,” said Sen. Chuck Grassley, R-Iowa, who sponsored the legislation which passed by unanimous consent. “This bill allows individuals to act in their own interests with their own assets without having to rely on a family member or the courts.”
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Special needs trusts can be vital for people with disabilities who rely on government benefits like Medicaid and Supplemental Security Income. To qualify for such programs, individuals cannot have more than $2,000 in assets at any given time. However, money saved within a special needs trust does not count against the asset limit.
A companion bill is currently pending in the House of Representatives.
Separately, states are working to implement the Achieving a Better Life Experience, or ABLE, Act, which offers another way for people with disabilities to save money. Under that law, individuals with disabilities will be able to establish ABLE accounts where they can accrue up to $100,000 without compromising their government benefits.
Even after ABLE accounts become available, however, experts say that deposit limits on the new accounts will mean that many people with disabilities will continue to rely on special needs trusts as well.