Blog: Bill seeks to bolster Special Needs Trust options – Financial Regulation News – Financial Regulation News

U.S. Sens. Todd Young (R-IN) and Maggie Hassan (D-NH) are detailing legislation that would provide families with greater options and flexibility regarding Special Needs Trusts.

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The Special Needs Trust Improvement Act of 2022 would aid in choosing the remainder beneficiary of trusts established for a loved one who has a disability or chronic illness.

The senators acknowledged the previously enacted Setting Every Community Up for Retirement Enhancement (SECURE) Act empowered families to better plan for loved ones with a disability or chronic illness by allowing retirement funds placed in a Special Needs Trust to be distributed over the lifetime of the individual in place of the default 10-year payout rule.

However, the SECURE Act did not allow families to name charitable organizations as remainder beneficiaries of Special Needs Trusts, enabling a gap constraining families from completely implementing financial planning goals and supporting charitable organizations while also providing for their loved ones with special needs.

“Hoosier families of individuals with special needs who use their retirement savings to plan for the care of their loved ones should not be restricted from also giving to charitable organizations,” Young said. “I’m proud to work with Sen. Hassan on this bipartisan bill to provide relief to these families and the communities that support them.”

Hassan said parents with children experiencing disabilities have unique considerations when writing a will.

“When designating beneficiaries for a Special Needs Trust, parents will often name a second beneficiary, such as their child’s service provider,” she said. “This bipartisan bill will extend flexibility to these families, ensuring that parents have peace of mind that their wishes will be honored and that their children will get the care that they need.”

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