Caring for a loved one with special needs in New Jersey requires the careful estate planning services E.A. Goodman Law, LLC provides. Given that an inheritance could jeopardize your loved one’s eligibility for disability benefits, Medicaid, and other public resources, working with an experienced special needs planning attorney is a wise choice if you are considering a third-party special needs trust.
Our elder law and estate planning practice is dedicated to helping clients protect loved ones with medical impairments and disabilities. We work to establish third-party special needs trusts that allow families to provide for disabled loved ones while maintaining their eligibility for vital public benefits and their quality of life.
We understand the emotional and financial challenges that caring for a loved one with special needs bring. We will offer you a supportive environment in which you can make informed decisions about your loved one’s well-being when you are no longer able to provide the care he or she needs.
At E.A. Goodman Law, LLC, we will provide you with compassionate representation when you need it most and the dedicated service your special needs loved one deserves. Please contact our office today for a consultation.
A Brief Overview of New Jersey a Third-Party Special Needs Trust
Generally, there are two types of special needs trusts — first-party and second-party. A first-party special needs trust is typically created by a disabled individual who receives money through an inheritance, legal settlement, retirement funds, or life insurance proceeds. By consulting with an experienced trust and estate attorney, it is possible to put in place a trust vehicle to hold these assets and preserve that individual’s eligibility for government benefits.
By contrast, a third-party special needs trust is intended for an estate planner whose objective is to provide for a loved one with a disability or an acquired or chronic illness. In this arrangement, assets are transferred into the trust and the designated trustee provides for the beneficiary’s needs, such as home furnishings, education, vehicle or travel expenses, recreation, vacations, and out-of-pocket medical expenses.
Because the trustee has full control over these resources, and because the special needs beneficiary does not have direct access to these funds, he or she retains eligibility for government benefits. Obviously, the person selected as a trustee must be capable and dependable; a trustee is considered a fiduciary and must always act in the beneficiary’s best interests.
What You Need to Know
It is important to note that funds in a third-party special needs trust cannot be used to pay for food and shelter (e.g. rent, mortgage, utility bills, property taxes). The beneficiary is permitted to retain his or her primary residence and one motor vehicle, however, because these are not considered “countable assets” for purposes of obtaining government benefits. Other noncountable assets include:
- Home furnishings and personal effects — Any items retained in the beneficiary’s home are covered.
- Property essential for self-support — Property used for purposes of work whether as an employee or business owner, however, there is a limit to the value of such property.
- Assets to attain an occupational goal — Recipients of Supplemental Security Income (SSI) are permitted to use certain assets under the SSI PASS Program for 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.
Other important points to note about third-party special needs trusts include:
- Trusts for a minor must be created by a parent, guardian, or the court.
- A trust can establish a guardianship that appoints a caregiver for the disabled person.
- The trust must be irrevocable to be effective — it cannot be changed or modified during the trust maker’s lifetime.
- The trust must contain a provision specifically stating that the (1) trust is not intended to provide basic levels of support, and (2) trust assets are solely intended for necessities to which the beneficiary is legally entitled.
Given the complexities involved in special needs planning, it is crucial to have informed representation. Trust E.A. Goodman Law, LLC to design a third-party special needs trust that will give you peace of mind knowing that all your loved one’s needs will be met.
Contact Our Experienced Morristown Third-Party Special Needs Trust Attorney
At E.A. Goodman Law, LLC, we help clients find solutions to the challenges of providing for loved ones with special needs. Well-versed in the applicable laws governing trusts in New Jersey and the eligibility requirements for disability benefits and other government resources, we will work with you to establish a third-party special needs trust as part of a comprehensive estate planning strategy. We regularly prepare wills, powers of attorney, and healthcare proxies and are here to help with all your estate planning needs. Please reach out to our office today to speak with an experienced third-party special needs trust.
EA Goodman Law helps clients with third-party special needs trusts throughout New Jersey including Bergen County, Morris County, Morristown, Somerset County, and Union County.