Special Needs Trust Fairness Act Is Reintroduced

By Jennifer Steneberg, Esq.

Legislation to enable individuals with disabilities to create their own special needs trusts (SNTs) has recently been reintroduced in Congress with bi-partisan support. Representatives Glenn Thompson (PA-05) and Frank Pallone, Jr., and Senators Chuck Grassley (R-IA) and Bill Nelson (D-FL) have introduced the Special Needs Trust Fairness Act of 2015 (H.R. 670/S. 349), seeking to correct a drafting error in an earlier law (Omnibus Budget Reconciliation Act of 1993), which has prevented competent individuals from establishing their own SNTs.

SNTs enable assets to be saved on behalf of people with disabilities, while protecting their eligibility for means-tested benefits. Programs such as Medicaid and SSI (Supplemental Security Income) require that applicants have no more than $2,000 in assets. SNTs can be used as a way of setting aside funds which can then be used for the many expenses not covered by public benefits.

Federal law currently requires that first party SNTs, created with assets owned by the beneficiary, be established on their behalf by a parent, grandparent, guardian or court. A first party SNT cannot be established by the beneficiary him or herself. This is inconsistent with the requirements for pooled first party SNTs, which are administered by nonprofit organizations and were also created by Congress in 1993. Individuals with disabilities have always been able to establish pooled trust accounts for themselves. More recently passed ABLE legislation similarly allows individuals with disabilities to create their own accounts. There is simply no logical reason for the conflicting requirements.

Given the increasing focus on empowering individuals with special needs and a growing self-advocacy movement, retaining legislation that presumes that all individuals with disabilities lack the mental capacity to manage their affairs is both insulting and uninformed. Consider, for instance, the large number of injured veterans, who have physical injuries but are mentally capable, who could benefit from this minor change in the law.

There would be little cost to either the federal government or the states if this legislation were passed, because upon the beneficiary’s death, funds remaining in a first party SNT must first be used to reimburse Medicaid for services provided. On the other hand, individuals who must rely upon a court to establish trusts on their behalf end up paying about twice what it would cost if they were able to establish them on their own.

The Special Needs Alliance has joined numerous other advocacy organizations– the National Academy of Elder Law Attorneys, National Multiple Sclerosis Society, Easter Seals and others–in supporting this legislation, which the Senate Finance Committee approved during the last session of Congress. This is a law that is long overdue.



  1. Paul Miller April 13, 2015 at 9:31 pm

    Hello, I am a 44 going on 45yr old man. I have recently found out that there is a gray area when it comes to appropriate healthcare for middle aged individuals with Spina Bifida. This is unacceptable. We are still human beings. We have the same needs and feelings as every other human being on the planet. Just as everyone else we would like to live a long healthy life. We are capable of contributing to society just as much as a person without a disability. We my have special needs when it comes to our disability and have just as much right to appropriate healthcare just as much as everyone else. many of us also have private heath care. Not all of us are on medicare or medicaid or disability for that matter. There needs to be more research in the area of individuals living with Spina Bifida that are now middle aged. At one time doctors may have thought we would not live past childhood or if we did we would not be able to do anything for ourselves and we should have either been aborted at the time or at the very least put in a home and we would just be a drain on society. I can honestly tell you from personal experience that I personally have lived a completely normal life. I have had an education. I continued my education after high school and I have had gainful employment. I also have a great social life. I have many good friends and a family that never gave up on me. Teaching me to never give up on myself. I am completely independent. There is nothing I can not do that person without a disability can do. With the exception of the ability of walking. As far as that is concerned there are ways around it. I have always had ingenuity some have even said I have “swagger”. My point to all this is we are worth saving. You might just be surprised to our “Abilities.” Sincerely, Paul E. Miller

    • Linda Singer June 24, 2016 at 4:18 pm

      Hi, Paul-I, also have SB, and have always been self-sufficient, worked, etc. Most fortunately, have also been able to walk with a gait. What really gets me is that I’ve looked into LTC insurance, and apparantly, there’s only 1 code for SB, and so, even though my condition is alot less severe than the norm, it’s amazingly too expensive for me to afford. Changes need to be made!!

  2. Kathy Ballentine April 15, 2015 at 6:17 am

    I have a daughter with a medical malpractice special needs trust and I feel that I was lied to about the obra trust, because my daughter has enough money coming in monthly to take care of her own medical need as long as she lives. We do not receive SSI. I have been taking care of her for 22yrs she has never had a bed sore and I feel as if I am being treated like I did something wrong I darn near had to have a stroke for a sufficient raise. I need to be informed about my rights as her guardian. I don’t need to hear all this law language I need someone to be real with me period, because my eyes are wide open to the system and it is not a pretty site in Illinois or ccok county. HELP

    • Pam Barbarito October 7, 2015 at 2:03 am

      Hi Kathy,

      I am a special needs beneficiary. I have studied trusts and the laws related to obra for many years. I am also aware of the role they play in guardianships.

      If you are able to provide me with a few more facts I might be of help to you.

      Who told you a special needs trust was necessary under the circumstances of your daughter’s medical and financial circumstances? Was it an attorney or another source who gave you the information?

      Was a trustee appointed by the court to manage the assets of your daughter’s special needs trust or are you trustee of the trust as well as your her guardian?

      Does the special needs trust operate under court supervision?

      Is court approval required for disbursements made from the special needs trust?

      Who is making you feel like you are doing something wrong?

      By “raise” do you mean disbursements from the special needs trust for her needs and your guardianship fees?

      I am aware of the issues about which you speak transpiring in Illinois and many other states. I am sorry you find yourself in such an unfortunate predicament. I understand based on my own inexplicable experiences relating to these matters how difficult your experience may be.

      Again, if I can help by way of sharing pertinent information, I would be glad to do so.


  3. Stephanie VanArsdale March 26, 2016 at 4:22 am

    I would love some information on how this SNT is suppose to really work.. Ive got a 20 year old daughter that for the most part lives a independent life she is a T-5 T-12 paraplegic but is able to do everything independently with the a few exceptions that most 20 year olds have a hard time doing. (House work, mowing the yard, working) she is able to work but at this time has decided to attend college.. When we were approached about the trust it sounded great but now that we are 8 years in to the situation it is terrible.. She get no state benefits she is on my insurance and will be for as long as god allows me and my husband to work.. Her trustee lied about certain things like getting her a home, letting her receive her structure payment that they have going straight into the SNT. They refuse to give her money for wheelchairs, spending, clothing, shoes,, until she seeks professional assistance on getting on medicaid and ssi.. she has been trying to find a job but lets face it fair legal or not there just are NOT may companies out there that want to hire a 20 year old that is in a wheel chair… There has to be some rights out there for her its her money and she cant touch it… If I would of know the real truth behind the SNT i would of never set this up for her I would of invested the money instead its really sad when the attorney get more of her money to spend then she does… so in plain english can someone direct me or my daughter in the right direction.. She really dont care if she touches the trust but she should at least get her structure payment like we were told she would… so again please help…

    thank you

    Stephanie (concerned mother)

  4. Angela Field October 1, 2016 at 1:35 am

    SNT needs to allow the parents of beneficiaries more say in how the money is spent. When it’s court ordered and a Trustee is in charge, they have all the power when a parent who is the Guardian has nothing. Sometimes I feel that having a Trustee is a waste of money. Why can’t the law allow the money to be invested by a financial advisor and that person gives an allowance to the parent for the needs of the beneficiary. We are finding out the hard way that Trustees and Special Needs attorneys makes way too much money for doing almost nothing. And courts don’t care.

    • p, barbarito February 2, 2017 at 2:59 pm

      Hi Angela,

      I would be happy to talk to you. I have a special needs trust and have been through court system and have a fairly good understanding of applicable law.

  5. shaunette kuipers April 29, 2018 at 3:17 pm

    Hello. I am 43 and currently on SSI. My father just passed away and left me an inherited IRA. Enough where I would lose benefits. I got an attorney and we set up a special needs trust with the courts and with my cousin as my trustee. Any how, I just read online about the Special Needs Trust Fairness Act that came to law in Dec 2016, Does this mean that I can be my own trustee instead of my cousin? I have not put claimed to my inheritance yet. I want to be sure I am doing the right thing. I trust me with my money and no one else. Could someone give me some advice please. Also now, my cousin will be going to jail for 10 months here soon as well. The courts already approved him. But I have not released the money. I hope I am not too late for me to be my own trustee if i can.

    • Jennifer Steneberg April 30, 2018 at 7:07 pm

      Hi Shaunette. The Special Needs Trust Fairness Act allows for a person with a disability to create a special needs trust for his/herself. Unfortunately, however, the trust must still be administered by a Trustee who is not the beneficiary. So, you can not serve as the Trustee of your own special needs trust. It does seem like having someone other than your cousin serve as your Trustee might be advisable. I would suggest that you contact one of the members of the Special Needs Alliance in your State to see what would be involved in changing your Trustee.

  6. Erzsebet Konya May 28, 2018 at 8:53 pm

    Thanks for helping with the fallowing to get clear see ; Planing on : Supplemental Needs Trust ,. That will be drafted by an attorney, Beneficiary’s daughter will be the Trustee and also she will be a residual beneficiary of this trust later. The beneficiary’s settlement is still at the personal injury attorney’s office waiting to be paid out. Question : Is that makes any different how the found will be deposited : a) If it will be made out a check to payable to the bank account of SNT or,.. b) if it will be wired to SNT.once it was created and account was set up in the bank ? Also is a Question remains : Is this type of Supplemental Needs Trust has to be :” First Party self settled SNT/Trust” or possible to drafted Legally- correctly by an attorney,.. as a ” Third -Party trust “( with no Medcaid Pay- back provision), for that reason because the settlement never received by the beneficiary “In -Hand “, but will be deposited by the Trustee or wired by P.I. attorney’s office directly in to the SNT . Please let me know that what are the,most important to be concern all above,.. that was mentioned or /missed . Thank you in advance for your advise , Elizabeth

  7. Confused June 28, 2018 at 7:53 pm

    I am an adult with a disability since childhood. I have relied on family members for financial support my whole life, and they have been generous to support me. Along with this though, I have not been allowed to decide very much for myself. My parents recently retired and I am now allowed to apply for SSDI and I would also like to set up an ABLE account and first party SNT. I do not have money for help with this. Do you know of resources that are available online? Templates for trust documents? Thank you!

  8. UpSNTCreek July 19, 2018 at 10:21 pm

    I am under 65 and on disability.

    Recently I inherited an IRA left directly to me worth approx. $180,000.

    My question is: Can I take a lump sum distribution from the IRA, pay the taxes, and then put the balance in a first party special needs trust with a Trustee and retain my Disability Benefits?

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