Bill Overview
Title: Special Needs Trust Improvement Act of 2022
Description: This bill allows a nonprofit charitable organization to be named as the remainder beneficiary of a Special Needs Trust (i.e., a trust that preserves a beneficiary's eligibility for needs-based government benefits).
Sponsors: Rep. Schneider, Bradley Scott [D-IL-10]
Target Audience
Population: People with disabilities who are beneficiaries of Special Needs Trusts globally
Estimated Size: 6000000
- Special Needs Trusts (SNTs) are set up for individuals with disabilities to ensure their eligibility for government benefits like Medicaid and SSI is preserved.
- The bill specifically involves amending the rules on who can be a remainder beneficiary, potentially affecting charitable organizations named in SNTs.
- By allowing non-profit organizations as remainder beneficiaries, the act could impact organizations involved in supporting individuals with disabilities as well as the individuals themselves.
Reasoning
- The target population is approximately 6 million people in the U.S. who are beneficiaries of Special Needs Trusts (SNTs).
- Special Needs Trusts protect eligibility for government benefits while managing assets for individuals with disabilities.
- By allowing nonprofit organizations to be named as remainder beneficiaries in SNTs, this policy might make it more appealing for trustees to consider charities when setting up trusts, thereby also potentially benefiting the supported individuals through additional services or legacy intentions.
- Since a significant majority of SNT Trusts do not involve large funds that could influence large scale administrative or legal changes, the personal impact is more pertinent to individuals' well-being in terms of security and support from trusts.
Simulated Interviews
Graphic Designer (Austin, TX)
Age: 45 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 20.0 years
Commonness: 5/20
Statement of Opinion:
- The policy feels positive, making it easier for nonprofits to be included.
- Could lead to more resources flowing into supporting individuals with disabilities.
- If a charity I trust were a beneficiary, I might feel more secure.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 9 | 7 |
| Year 20 | 9 | 7 |
Retired Teacher (Des Moines, IA)
Age: 67 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 8/20
Statement of Opinion:
- The changes to allow nonprofits as beneficiaries feel like a good step.
- Could encourage my family to set up beneficiaries more confidently.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 7 | 5 |
Software Engineer (Portland, OR)
Age: 32 | Gender: other
Wellbeing Before Policy: 7
Duration of Impact: 20.0 years
Commonness: 4/20
Statement of Opinion:
- There could be additional support options.
- Naming the nonprofit helps secure future resources.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 9 | 7 |
| Year 10 | 9 | 8 |
| Year 20 | 9 | 8 |
Consultant (Miami, FL)
Age: 54 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 5.0 years
Commonness: 7/20
Statement of Opinion:
- This policy allows peace of mind knowing funds left over could support a cause I believe in.
- It could even improve trust management relationships.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 9 | 8 |
| Year 20 | 9 | 8 |
Freelance Journalist (Seattle, WA)
Age: 40 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 20.0 years
Commonness: 3/20
Statement of Opinion:
- Makes trusts more beneficial as it might grow support services.
- A nonprofit I trust could be set for additional assurance.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 9 | 7 |
Accountant (Boston, MA)
Age: 29 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 15.0 years
Commonness: 3/20
Statement of Opinion:
- Policy empowers individuals to leave trust assets to socially supportive organizations.
- Could make future planning easier knowing trusted nonprofits benefit as well.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 9 | 7 |
| Year 10 | 9 | 8 |
| Year 20 | 9 | 8 |
Warehouse Manager (Chicago, IL)
Age: 62 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 20.0 years
Commonness: 6/20
Statement of Opinion:
- Positive about naming nonprofits, it provides a sense of impactful legacy.
- Encourages fund allocation to trusted organizations.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 8 | 7 |
Volunteer Coordinator (Raleigh, NC)
Age: 50 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 20.0 years
Commonness: 2/20
Statement of Opinion:
- Encourages more trusts to consider positively engaging in my organization.
- Could lead to improved program funding from such considerations.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 9 | 6 |
| Year 10 | 10 | 7 |
| Year 20 | 10 | 8 |
College Student (Denver, CO)
Age: 22 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 10.0 years
Commonness: 10/20
Statement of Opinion:
- Uncertain if I'd myself name nonprofits, but it seems beneficial overall.
- Good for increasing trust flexibility and societal contributions.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 9 | 8 |
| Year 5 | 9 | 8 |
| Year 10 | 9 | 8 |
| Year 20 | 9 | 8 |
Small Business Owner (Minneapolis, MN)
Age: 48 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 8/20
Statement of Opinion:
- Overall good for morale and planning.
- Might not directly impact day-to-day unless trust assets increase significantly.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 6 |
Cost Estimates
Year 1: $1000000 (Low: $800000, High: $1200000)
Year 2: $1200000 (Low: $900000, High: $1500000)
Year 3: $1300000 (Low: $1000000, High: $1600000)
Year 5: $1500000 (Low: $1100000, High: $1700000)
Year 10: $1600000 (Low: $1200000, High: $1900000)
Year 100: $2000000 (Low: $1500000, High: $2500000)
Key Considerations
- Special Needs Trust structures are critical to maintaining government benefits like SSI and Medicaid for disabled individuals, and any change in beneficiary rules needs careful integration.
- Monitoring and oversight of nonprofit activities as remainder beneficiaries need strengthening to prevent misuse or inefficacy.
- Potential conflict of interest for charitable organizations with financial stakes in SNTs.