FOR BREAKING NEWS VISIT www.couriersun.com october 16, 2014 • The Courier sun 25 The Elder Law Minute TM ANOTHER STEp TOwARDS EQUALiTy FOR DiSAbLED iNDiviDUALS – TwENTy yEARS LATER BY RONALD A. FATOULLAH, ESQ. AND DEBBY ROSENFELD, ESQ. ELDER LAW RONALD FATOULLAH, ESQ, CELA* 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 financial hardship for the disabled individual. Finally, a bill called the Special Needs Trust Fairness Act of 2013 has been introduced in Congress to correct this simple error. For disabled individuals, the Americans with Disabilities Act of 1990 was a big step towards equality and preservation of dignity. Three years later, the Omnibus Budget Reconciliation Act of 1993 (OBRA 1993) provided another significant win for disabled individuals by allowing the use of a Supplemental Needs Trust (aka Special Needs Trust) to preserve the assets of the disabled individual without jeopardizing his/ her eligibility for government benefits. 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 benefits (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 first-party SNT is set up with the funds of the disabled individual. The error to be corrected by this new bill specifically deals with first-party SNTs. Under OBRA 1993, a disabled individual can preserve his/her assets by setting up a first-party SNT. It can either be a ‘pooled trust’ or an individual trust. A pooled trust is set up with a non-profit 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 first 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 2013 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 firm that exclusively concentrates in elder law, estate planning, Medicaid planning, guardianships, estate administration, trusts and wills. The firm has offices in Forest Hills, Great Neck, Manhattan, Brooklyn, and Cedarhurst, NY. This article was written with the assistance of Yan Lian Kuang-Maoga, an elder law attorney with the firm. Ronald Fatoullah & Associates can be reached by calling (718) 261-1700, 516-466-4422, or toll free at 1-877-ELDER-LAW or 1-877-ESTATES. Life is full of risks! Are you protected? Without the proper insurance protection you could be financially devastated. The insurance experts at MEMBER BROKERAGE SERVICE, LLC, will help protect you from these unforeseen hazards AND save you money in the process. We offer you flexible and affordable terms with NO broker fees. 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