20 THE QUEENS COURIER • HEALTH • OCTOBER 1, 2015 FOR BREAKING NEWS VISIT www.queenscourier.com health The Elder Law Minute TM An Update on the Special Needs Trust Fairness Act BY RONALD A. FATOULLAH, ESQ. AND YAN LIAN KUANG-MAOGA, ESQ. There have been major laws passed over the years to ensure equality for disabled individuals and the preservation of independence and dignity for these individuals. However, an obvious and seemingly simple drafting error has been left unchanged in one of those laws for over twenty years. The consequence, most likely unintended but nevertheless far-reaching, has been to deny a disabled person his/her fundamental right to enter into contracts, thereby causing unnecessary stress and fi nancial hardship for the disabled individual. Finally, a bill called the Special Needs Trust Fairness Act of 2015 has passed the Senate as of September 9, 2015 and will be making its way to the House next. For disabled individuals, the Americans with Disabilities Act of 1990 was a big step towards equality and preservation of dignity. ELDER LAW Three years later, the Omnibus Budget Reconciliation Act of 1993 (OBRA 1993) provided another signifi cant win for disabled individuals by allowing the use of a Supplemental Needs Trust (a/k/a Special Needs Trust) to preserve the assets of the disabled individual without jeopardizing his/her eligibility for government benefi ts. The funds in a supplemental needs trust are to be used to improve the quality of life of the disabled individual by supplementing expenses that are not covered by his/her government benefi ts (i.e. magazine subscriptions or travel). There are different types of Supplemental Needs Trusts (SNTs). A third-party SNT is set up by a third party using the money of the third party, not the disabled individual. A fi rst-party SNT is set up with the funds of the disabled individual. The error to be corrected by this new bill specifi cally deals with fi rst-party SNTs. Under OBRA 1993, a disabled individual can preserve his/her assets by setting up a fi rstparty SNT. It can either be a ‘pooled trust’ or an individual trust. A pooled trust is set up with a non-profi t organization and is administered by the organization. The law provides that a pooled trust can be established by “the parent, grandparent, or legal guardian of such individual, by such individual, or by a court.” An individual trust is a “private trust” administered by a trustee who is often a family member. The drafting error appears in the section of the law regarding how to establish the fi rst party individual trust. The law provides that an individual trust can be created by “the parent, grandparent, or legal guardian of such individual, or by a court.” This section of the law does not permit a disabled individual to set up his/her own trust even if he/she has the mental capacity to do so. Therefore, for the past twenty years, if an adult disabled individual wanted to establish an individual trust and he/she did not have a parent, grandparent, or legal guardian, the individual would have to retain an attorney to ask a court for permission to create the trust. All individuals have the fundamental right to enter into contracts, and trusts are considered contracts. Consequently, for a disabled individual who has the mental capacity, the denial of his/her right to create his/her own trust is extremely frustrating and is a blatant inequality in the law. This impediment is often costly and time-consuming for the individual because of the need to petition for court approval. Even if the individual does not have to go through this process because he/ she has a surviving parent or grandparent, this obstacle takes away the individual’s independence. The Special Needs Trust Fairness Act of 2015 is long overdue. Please contact your local politicians to support the enactment of this bill. Ronald A. Fatoullah, Esq. is the principal of Ronald Fatoullah & Associates, a law fi rm that concentrates in elder law, estate planning, Medicaid planning, guardianships, estate administration, trusts, wills, and real estate. Yan Lian Kuang- Maoga, Esq. is an elder law attorney with the fi rm. The law fi rm 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 the cofounder of JR Wealth Advisors, LLC. The wealth management fi rm can be reached at 516-466-3300 or 800-353-3775. RONALD FATOULLAH, ESQ, CELA* WINNER 3 YEARS IN A ROW Never pay FULL PRICE for Medications AGAIN! Rx Help Centers is a drug advocacy program dedicated to helping the consumer get the best price on all of your medications. Our expert team will help you receive the lowest prices for all of your name brand medications. Our service will compliment any existing coverage that you already have. Whether you are insured, uninsured , underinsured or Medicare, we can help. Register for free at www.rxhelpcentersqueens.org Our customers receive assistance for only a nominal charge with NO LIMIT on the number of medications that we can help with. With thousands of name brand and generic medications, we can help you and your family maximize your savings on prescription medications. With Rx Help Centers, never pay full price again! Register for Free www.rxhelpcentersqueens.org
QC10022015
To see the actual publication please follow the link above