Military members and retirees now have the option to designate their Survivor Benefit Plan Annuity (SBP) to a Special Needs Trust established pursuant to 42 U.S.C. 1396p(d)(4)(A) or (C) for a dependent disabled child. As a result of the Disabled Military Child Protection Act included in the 2015 National Defense Authorization Act a member or retiree who elects SBP coverage that includes coverage for a dependent child may now, at any time, irrevocably decide to substitute a Special Needs Trust as the SBP beneficiary to receive any SBP annuity payments that would otherwise be payable to or on behalf of the disabled dependent child. This irrevocable decision may be made during the life of the member through a written statement that designates future SBP payments to the Special Needs Trust. In general, the assets of a Special Needs Trust are not treated as available to the disabled beneficiary under Social Security and Medicaid laws, so that the disabled individual may continue to qualify for means-based public benefits (e.g., SSI and Medicaid), while also benefiting from the Special Needs Trust to supplement their needs. On December 31, 2015 the Department of Defense released its policy guidance and template for attorneys to allow such designations to take place.
If you’re curious about the benefits of SBP or a Special Needs Trust, feel free to get in touch with one of our Special Needs Law specialists.