20 FEBRUARY 3 - FEBRUARY 9, 2017 BROOKLYN MEDIA GROUP BY RONALD A. FATOULLAH, ESQ. & STACEY MESHNICK, ESQ. The Special Needs Trust Fairness Act is now law •Elder Law• •Trusts & Estates• •Probate• •Medicaid Eligibility & Applications• •Preparation of Wills• •Special Needs Planning• •Guardianships• •Estate Mediation• 1-877- ELDER LAW 1-877-ESTATES Queens Queens • Long Island Island • Manhattan • Brooklyn ATTORNEY ADVERTISING Ronald Fatoullah has been selected as one of the New York area’s Best Lawyers® in 2015. A very important bill which was introduced in Congress several years ago, and which will help to provide equality for disabled individuals, has finally become law. When a disabled person who is in receipt of or in need of government benefits receives assets from a personal injury settlement or from an inheritance, it may be appropriate to establish a special needs trust in order to maintain eligibility for such benefits (because otherwise the receipt of a big settlement or inheritance would put the individual over the allowable resource level). A special needs trust allows an individual to maintain Medicaid/SSI eligibility as long as the trust contains a provision that the government agency will be reimbursed for its expenditures upon the death of the individual. In most cases, setting up a special needs trust is the only option available in order to remain eligible for government benefits. However, until recently, it was required that a parent, grandparent, court or guardian establish a Special Needs Trust on behalf of a disabled individual, even if the individual had the mental capacity to do so himself. Fortunately, the Special Needs Trust Fairness Act, federal legislation that allows individuals with disabilities to create their own special needs trusts instead of having to rely on others, is now law. The measure was included in the 21st Century Cures Act, a $6.3 billion package of health-related initiatives signed by President Obama on December 13, 2016. The Fairness Act, introduced in 2013 by Representative Glenn Thompson, fixes the frustrating drafting error in the Social Security Act that had prevented people with disabilities from creating special needs trusts to hold their own funds. Under prior law, only a parent, grandparent, guardian or court could establish a first party special needs trust (a trust which is set up with the funds of the disabled individual) to hold the beneficiary’s assets. This forced competent people with disabilities to incur unnecessary expense and waste time to set up trusts that they could otherwise have created on her own with the help of an attorney. The Special Needs Trust Fairness Act inserts language into the Social Security Act to give individuals with special needs the same right to create a trust as a parent, grandparent, guardian or court. If competent to do so, individuals can now create trusts on their own behalf using their own assets. These trusts must still contain provisions that Medicaid will be reimbursed from the estate upon death. Before the Fairness Act, it was demeaning for adults with capacity to be told they had to ask a parent or grandparent to help them establish a trust. For those people without a parent or grandparent, attorneys had to obtain court jurisdiction to establish a trust. Once an attorney was in court, the court often placed the trust under ongoing court supervision. This meant that the disabled individual’s funds had to be used to pay attorney’s fees, bond, filing fees, accounting, etc., instead of being used for the individual’s own needs. Disabled people who had capacity, but didn’t have a parent or grandparent, were subjected to these unnecessary costs and fees, which is fundamentally unfair. The Fairness Act will apply to trusts established on or after December 13, 2016, the date that the Cures Act was enacted. Ronald A. Fatoullah, Esq. is the principal of Ronald Fatoullah & Associates, a law firm that concentrates in elder law, estate planning, Medicaid planning, guardianships, estate administration, trusts, wills, and real estate. Stacey Meshnick, Esq. is a senior staff attorney at the firm who has chaired the firm’s Medicaid department for over 15 years. The law firm can be reached at 718-261-1700, 516-466-4422, or toll free at 1-877-ELDER-LAW or 1-877-ESTATES. Mr. Fatoullah is also a partner with Advice Period, a wealth management firm, and he can be reached at 424-256-7273. THE ELDER LAW MINUTE TM
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