The 10th Annual Developmental Disabilities Public Policy Conference

April 4, 2017 By Margaret Fulton

I attended the very informative 10th Annual Developmental Disabilities Public Policy Conference sponsored by The Arc of California and United Cerebral Palsy. The conference was held March 26 through March 28, 2017, in Sacramento, California. The first agenda item was a discussion from the Lanterman Coalition 2017 on their policy issues, including rates for service providers, and possible changes which would be brought about by repeal of the Affordable Care Act. Peter Berns, CEO of The Arc of the United States, discussed what is at stake and where things stand with the new Congress and the new Administration. Thomas Coleman, the Legal Director of the Spectrum Institute, provided substantial information on supported decision-making, which provides more independence for people with disabilities. John Ariale, the principal drafter of the ABLE Act, discussed its current provisions and also discussed possible future legislation involving ABLE. Christina Elliott, Executive Director of the CalABLE Board, discussed the proposed ABLE program in California. Scott Graves, Director of Research, California Budget & Policy Center, spoke on the current California budget and programs for persons with disabilities. A presentation was made on In-Home Supportive Services (IHSS) and Federal and State activities that may impact IHSS consumers and providers. A final program on employment issues for individuals with intellectual and developmental disabilities was presented by Joe Xavier, Director of the Department of Rehabilitation, and several others.

The program also included an ABLE Act intensive training session for attorneys and private fiduciaries. This special breakout session explored the ABLE Act and housing, the ABLE Act and divorce, and the ABLE Act and structured settlements. I was a presenter in this session. The entire program provided an excellent review of public policy issues impacting persons with disabilities.

Comparing an ABLE Account with a Third Party Special Needs Trust

March 22, 2017 By Margaret Fulton

There has been much discussion about the recent legislation involving the Achieving a Better Life Experience (ABLE) Act. For a discussion of ABLE accounts, please scroll down to read about the ABLE Act.

ABLE accounts are an incredible resource for persons with a disability. ABLE accounts are a great tool to use in conjunction with special needs trusts. However, ABLE accounts are not always a replacement for special needs trusts. Each person has his or her own individual needs and that person’s situation needs to be assessed to determine what will work best for the person with special needs and his or her family.

This chart is here to assist you in understanding the important differences between an ABLE account and a third party special needs trust.

You can view and print this chart here: ABLE Account compared with SNT (edited March 2017)

Issues	ABLE Account	Third Party Special Needs Trust
Who can use?	Only persons disabled before age 26	Any person with a disability
Who can fund?	Anyone, including person with a disability	Anyone, including person with a disability IF (s)he has capacity (recent legislation in December 2016 allows this)
How many can person have?	One	Unlimited
Who can control?	Person with a disability and likely their legal guardian, conservator, or agent	Anyone except the person with a disability and their spouse
Who inherits on death of person with disability?	Medi-Cal must be repaid for amounts paid by Medi-Cal after the creation of the ABLE account; then can go to heirs	Person with a disability’s heirs or whomever is named in document
How much can be funded in a year?	$14,000 (or annual gift exemption)	Unlimited
Is funding gift-tax free?	Yes	No, but no gift tax will be paid until the donor has given more than $5 million (indexed to inflation)
Is there a cap on how much can be in account?	Yes, currently $100,000 limitation for SSI recipients and up to State 529-plan limitations ($475,000 in CA)	No
How is income taxed?	No income tax	Taxed as a non-grantor trust at highest marginal tax rate
What type of distributions can be made?	Distributions can be made for “qualified disability expenses” such as housing transportation, assistive technology and more	No limitation, except for certain disbursements, such as for housing, may reduce or eliminate SSI or Medi-Cal eligibility

2017 Special Needs Planning Symposium

February 28, 2017 By Ashley Clower

February 17, 2017 – February 18, 2017

Attorneys Margaret Heiser Fulton and Ashley Clower attended the Special Needs Symposium held in Santa Rosa, CA. This two-day event was dedicated to the education of the professionals who plan for persons with disabilities and administer special needs trusts. The seminar was packed with information, presented by leading experts who discussed legal issues, nursing and care issues, public benefits and financial issues. Attorneys, professional fiduciaries, financial planners and families of persons with disabilities were in attendance.

Some of the sessions included: Obtaining and Evaluating Health Care Coverage for Persons with Disabilities; Advocating for Regional Center Services for Clients with Developmental Disabilities; Navigating the SSA Programs of Supplemental Security Income (SSI) and Childhood Disabled Beneficiary (CDB) Benefits for Special Needs Trust Beneficiaries; Putting Together the Public Benefits Puzzle for Special Needs Trust Beneficiaries; Creating Systems to Properly Administer Special Needs Trusts; Properly Paying for Housing for a Special Needs Trust Beneficiary and Avoiding Unintended Consequences; Properly Paying Caregivers for Special Needs Trust Beneficiaries; and Protecting the Special Needs Trustee when Dealing with Courts, Public Benefit Agencies and Families.

It was a valuable experience to hear from those persons who are “in the trenches”. It was a great networking opportunity to expand our connections so that we can provide our clients options for creating the best team necessary for their loved ones with special needs.

Special Needs Trust Fairness Act Passes

December 14, 2016 By Ashley Clower

December 13, 2016

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Former President Obama signed the Special Needs Trust Fairness Act into law effective December 13, 2016. Prior to this act, a disabled person who received a sum of money, i.e., from an injury settlement, was unable to create his or her own special needs trust without the help of a parent, grandparent or guardian. A simple change to the existing statute allows individuals with disabilities, who have capacity, to create their own special needs trusts as defined by 42 U.S.C. Section 1396p(d)(4)(A). It is a huge win for persons with disabilities to eliminate the presumption that all individuals with disabilities lack the mental capacity to handle their own financial affairs. There have been incredible advocacy efforts of the National Academy of Elder Law Attorneys (NAELA) to make this legislation happen. You can see NAELA materials here.

Because of this legislation, there will no longer be a need for disabled persons with capacity to have to petition the Court to have their settlement proceeds placed into a special needs trust. Now there will be less out of pocket costs for injured persons, less involvement with other family members, and less time spent in the process of trying to finalize the person with a disability’s settlement. A person with a disability will be now be able to set up a special needs trust to receive his or her settlement funds while still being able to keep important needs-based public benefits, such as Medi-Cal or SSI.

The new Act only adds two words to the existing statute. “The individual” has been added to the list of persons authorized to establish a special needs trust as defined by 42 U.S.C. Section 1396p(d)(4)(A), in addition to a parent, grandparent, guardian, or the Court.

The new Act reads as follows and can be viewed here:

(a) In General.—Section 1917(d)(4)(A) of the Social Security Act 42 U.S.C. 1396p(d)(4)(A) is amended by inserting “the individual,” after “for the benefit of such individual by”.

(b) Effective Date.—The amendment made by subsection (a) shall apply to trusts established on or after the date of the enactment of this Act.

Special Needs Trust and the ABLE Act

October 12, 2016 By Margaret Fulton

Chances are that you have heard of a Special Needs Trust. What is a Special Needs Trust and why is it necessary? You may have also heard about the ABLE Act. Both the ABLE Act and special needs trusts are important tools in planning for the future of your special needs child.

Parents of a child with special needs, or other family members, can leave that child’s inheritance to the special needs trust instead of directly to the child. If your child will not able to work or live independently, he or she may need to remain eligible for “means-based” public benefits, such as SSI or Medi-Cal. The receipt of an inheritance by your disabled child might cause the child to lose eligibility for these vital benefits. A properly drafted special needs trust can hold assets for the benefit of a disabled person without those assets counting as the property of the disabled person. The assets of the special needs trust will supplement the public benefits the disabled person may be eligible to receive and will make it possible for the disabled person to have the same quality of life in the future.

Another new option for parents and special needs persons is to open an ABLE Account. The Achieving a Better Life Experience (ABLE) Act of 2014 allows people who have disabilities that began before they turned 26 to keep money in a special tax-advantaged account. The first $100,000 in an ABLE account does not count against the $2,000 Supplemental Security Income (SSI) resource limit, and none of the money in an ABLE account is counted for determining Medi-Cal eligibility. Each state is authorized to open its own ABLE account program, and California recently passed legislation to establish an ABLE program. However, the California program is not available yet and may not be ready for some time. The federal legislation does provide that you can open an ABLE account in another state. Ohio is the first state to establish this program and Tennessee has just opened an ABLE program. Both states allow contributions from residents of all states.

Article was written for Parents Resource Guide Summer 2016 and can be viewed at: parents-resource-guide-summer-2016.

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