The Special Needs Trust (SNT) Improvement Act of 2022 is now in effect after being signed into law as part of the much larger Consolidated Appropriations Act of 2023. It amends The Secure Act of 2019. The Special Needs Alliance, a national advocacy group of which Brian Rubin is a past President, and Benji Rubin is a member of the Board of Directors, was instrumental in the passage of this favorable legislative change for special needs individuals and their families. A special needs trust attorney at Rubin Law can assist with your future planning and, if appropriate, determine whether this new legislation affects your estate planning goals.
The Secure Act of 2019 permitted parents of children with special needs to better plan for their futures by allowing retirement funds placed in special needs trusts to be distributed out of an inherited IRA (and therefore to become taxable) over their children’s lifetimes. . This is in contrast to the requirements of The Secure Act that apply to an inherited IRA owned by a child without disabilities in which the funds are to be paid out to the beneficiary within ten years..
As time went on, it became apparent that a quirk in the law unfairly punished parents who wanted to include charitable organizations in their estate planning process. In many cases, for the parent(s) of a child with special needs wanted to include a gift to the non-profit organization that provided special services to their child throughout their lifetime upon their child’s passing. This change in the law that was just signed now allows parents to not only to take advantage of tax savings when an inherited IRA is left to a special needs trust but also support the non-profit organizations that have supported the child.
In summary, the new law allows most charities to be named as remainder beneficiaries of special needs trusts while maintain favorable tax treatment for inherited IRAs owned by said trusts. Now, families can remember charities that provide program services to the special needs community upon the passing of family members with disabilities. Even after the child with special needs has passed, their legacy can live on by financially supporting the organizations that assisted them during their lifetime.
Contact Us Today to Learn More About a Special Needs Trust
Rubin Law is the only Illinois law firm exclusively dedicated to providing compassionate legal services for children and adults with special needs. In addition, we offer unique legal and future planning techniques to meet your family’s individual needs. At our law firm, you can discuss all your needs and objectives with an experienced Illinois special needs trust lawyer.
Call us today at 866-TO-RUBIN or contact us online to learn more about the services we can offer you and your family.
