Passage of the Special Needs Fairness Act - December 2016 Newsletter

On December 7, 2016, the Senate passed H.R. 34, which includes the Special Needs Fairness Act. It's expected to be signed by President Obama very soon.

The Special Needs Fairness Act corrects a technical error under the federal law that regulates First Party Special Needs Trusts. The change now allows competent disabled individuals to establish their own First Party Special Needs Trust. Prior to this change mentally competent disabled individuals had to rely upon their parent(s), a guardian or a court to establish the trust. Even if competent they still were forced to go through the additional legal expense of having the court establish the trust. This will no longer be needed. The special needs individual can establish the trust.

A First Party Special Needs trust is a trust that is funded by the disabled person's funds and not third-party money. The pay back provision and the requirement that the trust not be created by someone over the age of 65 remains.

How do disabled individuals suddenly receive funds? They may receive a direct inheritance; they may prevail on a personal injury suit or settlement; they may receive a social security back payment that puts them over the $2,000 resource limit.

We will see even a greater need for First Party Special Needs trusts because of provisions such as the Disabled Military Child Protection Act. The Act requires that funds from the survival benefit plan to the disabled child go into a First Party Special Needs Trust. If the parent never set up the trust and the disabled child is competent (doesn't need a guardian) they can set up the First Party Special Needs Trust themselves.

The National Academy of Elder Law Attorneys (NAELA) worked very hard over the last few years to get this change enacted. As a member of NAELA's public policy committee I was able to follow the ups and downs of the passage of this legislation. NAELA will continue to assure that Social Security and state Medicaid agencies quickly update their regulations to comply with the new federal law.

ABE ACT: Virginia 529 is rolling out its ABLE NOW accounts for disabled individuals on December 19, 2016. Go to to learn how to open up an ABLE Account. See my January 2015 Newsletter to learn more about the basics of ABLE Accounts.

Special Events: The Autism Society of Northern Virginia (ASNV) is holding an Advocacy Workshop & Q&A with Virginia Senator Barbara Favola on December 19, 7pm-9pm at County Board Room 311, in Arlington County Board Building 2100 Clarendon Blvd. Arlington, VA 22201 (at the Courthouse Metro station). We Hope to See You. RSVP to Elizabeth at

Edward Zetlin Law is experienced in Elder Law and Developmental Disability issues. Don't hesitate to call if you face such an issue or if you have additional questions. Edward Zetlin Law would be happy to discuss. Please contact us at 703-379-0442 or e-mail at

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