President Obama, in signing the 21st Century Cares Act into law at the end of 2016, has given many individuals with special needs across the country a very useful and benefit-saving planning strategy: the Self-Settled Special Needs Trust.
Individuals with disabilities, who have the capacity to do so, can now create their own self-settled trust to maintain their government benefits in the event of an inheritance or personal injury award without having to get a court order.
Previously, unless state law allowed it – which North Carolina law did not – individuals could not create their own self-settled special needs trust. They have to rely on a parent, grandparent, guardian, or judge to establish the trust for them. Now, individuals who have no living parents or grandparents and do not have or need a guardian, can create their own trusts without having to go to court – which could be a long and drawn-out process. This creates a “First-Party Trust” – which would still require Medicaid to be paid back after the individual passes – unlike a “Third-Party Trust.”
It also assists people who receive an inheritance or personal injury award which exceeds the $100,000 cap for ABLE accounts.
This sort of planning should not be taken lightly. Always consult an experience special needs planning attorney before moving forward with this type of planning.
Paul Yokabitus is the CEO and Managing Partner of Cary Estate Planning, a Cary, NC, estate planning law firm. With years of experience in estate and elder law, he has zealously represented clients in various legal matters, including estate planning, guardianship, Medicaid planning, estate administration, and other cases.
Paul received his Juris Doctor from the Campbell University School of Law and is a North Carolina Bar Association member. He has received numerous accolades for his work, including being named among the “Best Attorney in Cary” in 2016 and 2017 by Cary News and Rising Star in 2020-2023 by Super Lawyers.