Now that Congress has passed the ABLE Act, there is yet more good news for children with disabilities and their families. With the passage of the National Defense Authorization Act of 2015, Congress has, for the first time, allowed military members to name special needs trusts as beneficiaries of Survivor Benefit Plans (SBP). This means that military families will finally be able to direct SBPs to their children with special needs without compromising the childrens’ ability to access government disability and medical benefits. Through SBPs members of the military can elect to defer a portion of their retirement pay so that when they pass away a surviving spouse or dependent child will receive up to 55 percent of their retirement payments. However, up until now, military members had to name individuals as the beneficiaries of these SBPs — they could not name trusts as beneficiaries. This rule created a dilemma for the parents of children with special needs. On the one hand, the retiree could name a child with special needs as the beneficiary of his SBP and that child would receive much-needed income and monetary support. However, receipt of the SBP funds could compromise the beneficiary’s ability to receive means-tested benefits like Supplemental Security Income (SSI) or Medicaid. In order to correct this problem, advocates have been trying for years to advance a bill known as the Disabled Military Child Protection Act through Congress. The bill would allow military members to name special needs trusts as the beneficiaries of SBPs, freeing up SBP funds to be used for the benefit of a child with disabilities without harming the child’s ability to access SSI or Medicaid. Up until now, the bill has never come close to passage. This changed when advocates pushed Congress to add the provisions of the Disabled Military Child Protection Act to the 2015 Defense Authorization Act, the annual bill that funds the military. With the support of several prominent National Academy of Elder Law Attorneys (NAELA) members, language was added to the appropriations bill giving military members the ability to name first-party or pooled disability trusts as beneficiaries of SBPs. .
Stephen R. Elville, JD, LL.M
Elville & Associates, P.C.
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Steve Elville, of Elville and Assocaites, posts a THOUGHT OF THE DAY, daily on his website. Check it out at http://www.elvilleassociates.com/