On December 19, 2014, President Obama signed into law the National Defense Authorization Act of 2015. The law, for the first time, allows military members to name special needs trusts as beneficiaries of Survivor Benefit Plans (SBP). Through SBPs members of the military can elect to defer a portion of their retirement pay so that when they pass away, a beneficiary (spouse or dependent child) can receive up to 55% of the member’s retirement pay. Prior to the new law, only individuals could be named as beneficiaries. For a member with a disabled child, naming the child as beneficiary could result in the loss of any government needs-based benefits, specifically Medicaid and Supplemental Security Income (SSI), for the child. Now military families can designate a special needs trust as beneficiary of their SBPs to keep the government benefit intact. The funds in a special needs trust provide for the disabled child what the government benefits do not provide. All families should look into the creation of a special needs trust for their disabled members. If you have any questions regarding this or any other estate planning considerations, please contact Joe Mattera.
17 Feb 2015