Morris & Bergen County Special Needs Trust Lawyers
If you care for a loved one with special needs, it is crucial to carefully plan your estate because leaving that individual an inheritance could jeopardize his or her eligibility for government benefits, such as Medicaid, Supplemental Security Income (SSI) or Social Security Disability (SSD). The practice of special needs planning is a specialty unto itself since it is dedicated to protecting loved ones with medical conditions, developmental impairments or other disabilities.
E.A. Goodman Law, LLC, routinely works with clients throughout the state of New Jersey to establish special needs trusts. We are committed to helping families provide for loved ones with disabilities while maintaining their eligibility for vital public benefits and en
hancing their quality of life.
What is a special needs trust?
A special needs trust (SNT) is designed to hold assets for a person with a physical or mental disability or an individual with a chronic or an acquired illness. A properly designed SNT will ensure that the assets held within it will not be considered countable assets for purposes of obtaining government benefits. Additionally, a trustee is selected to manage the trust funds who has full control over these resources. Since the individual with special needs does not have direct access to these funds, he or she retains eligibility for benefits.
It is worth noting that a self-settled SNT must be irrevocable in order to be effective. This simply means that it cannot be changed or modified during the trust maker’s lifetime. The trust document must also contain specific language indicating that the trust is not intended to provide basic levels of support. Instead, the trust assets must be used solely for supplemental benefits to which the disabled individual is legally entitled.
These benefits include home furnishings, education, vehicle or travel expenses, recreation, vacations, and out-of-pocket medical expenses. Typically, the trust funds cannot be used to pay for food and shelter, which includes the recipient’s rent, mortgage, utility bills, or property taxes. Nonetheless, the disabled person is allowed to retain his or her primary residence and one motor vehicle without threatening government benefits, as these are considered non-countable assets.
Other property that is not considered resources for purposes of determining governmet benefit eligibility includes:
- Home furnishings and personal effects – There is no specific limiting definition for these items which means that anything retained in the beneficiary’s home is covered.
- Property essential for self-support – Property used for purposes of work, either as an employee or for running a business; however there are limits on the value of these items.
- Assets to attain an occupational goal – Under the SSI PASS Program, benefit recipients are allowed to use certain assets to help them achieve an occupational goal, including college, vocational training, or starting a business
- Burial and life insurance policies. Life insurance policies with cash surrender values less than $1,500 and burial insurance policies of any value.
Types of Special Needs Trusts
Although there are different types of special needs trusts, the most common is a third party trust. In this arrangement, the assets put into the trust are owned by someone other than the beneficiary (for example, a parent, or grandparent) and managed by a trustee who is tasked with providing for the beneficiary’s needs.
It is important to note that a special needs trust for a minor must be created by a parent, guardian or the court. It goes without saying that the person named as trustee must be capable and reliable and act in the best interests of the beneficiary.
Another type of trust is a first party trust which may be utilized when the disabled person receives money through a legal settlement, retirement funds, divorce settlement, life insurance proceeds or an inheritance. With the advice and guidance of a capable attorney, it is possible to create a trust vehicle to hold these assets and protect government benefits.
New Jersey Special Needs Planning Attorney
Given the legal complexities involved in the creation of special needs trusts, it is crucial to have the advice and guidance of a knowledgeable estate planning attorney. At E.A. Goodman Law, LLC, our legal team is well versed in the rules governing special needs trusts as well as the eligibility requirements for public benefits such as Medicaid, SSI and SSD. Through the years, we have gained recognition for being dedicated advocates of the disabled and for providing our clients with caring, efficient service. If you need assistance protecting the well being of a loved one with special needs, give us a call today or complete the contact form on our website.