Hamilton Special Needs Trusts Lawyer

The elderly and special needs individuals in the US are fortunate to have access to numerous government benefits. Both state and federal programs provide financial support and assistance to address their challenges and living costs. However, Social Security disability and other public assistance programs are usually needs-based, imposing strict rules on eligibility. The regulations disqualify individuals who are too “rich.” Regardless of the person’s medical condition and specialized care requirements, thresholds apply to assets and income.

This factor imposes unfortunate limitations on family members and loved ones who would like to contribute to the individual’s care through estate planning. By gifting or making distributions via a last will and testament, you could make the person ineligible. The New Jersey statute on special needs trusts was enacted to address this conundrum. With the proper documentation in place, it is possible to have certain trust assets excluded when considering eligibility for public assistance.

Plus, an additional key factor with special needs trusts is ongoing management to ensure compliance with the laws. Critical errors may thwart the purpose of the arrangement and disqualify the beneficiary. To avoid issues that contravene your intentions, count on Scott Counsel, P.C. to advise you. Please contact our firm today to schedule a consultation with a Hamilton special needs trusts lawyer, though some basics may also be helpful.

Synopsis of New Jersey Special Needs Trusts

As mentioned, a special needs trust (SNT) is an estate planning tool that enables an individual with a disability to receive financial support without affecting eligibility for Supplemental Security Income (SSI), Medicaid, and other needs-based programs. To better understand the specifics of SNTs, you should be aware of some trust basics:

Parties: The parties to a trust are the grantor that creates and funds it, the trustee who manages it, and the beneficiaries who receive distributions. The grantor and trustee may be the same person, but the trustee still has a fiduciary duty to the trust beneficiaries.
Trustee Duties: The trustee is responsible for carrying out the terms of the trust, including making distributions of principal and income to the beneficiary. The trustee may also have duties concerning investing trust property, collecting rents, and other tasks.
Trust Assets: Because the trustee has total control over trust management, the assets held in the trust are not considered as being controlled by the beneficiary.

Application of Trust Concepts to SNTs

With the above information in mind, the benefits of creating an SNT become clearer:

Even if you set aside the rules on net worth and financial thresholds, an individual with a disability may not have the mental capacity to responsibly manage the trust. With an SNT, you have a trustee to handle assets and distributions.
As a grantor, you can name yourself the trustee of an SNT. You have decision-making authority for distributions, though they must strictly adhere to the relevant regulations.
As the beneficiary, the individual with a disabling medical condition does not own or have control over trust distributions. Assets held in the trust are ignored for purposes of determining eligibility for public benefits.

A Closer Look at Two Types of Special Needs Trusts

Scott Counsel, P.C. handles two specific types of SNTs, and we can explain how they function in more detail.

Third-Party SNTs: This form is intended for the estate planning context, where you create the SNT for the benefit of the person with a disability. The most common option is establishing a living special needs trust that you would manage during your lifetime; you would choose a successor trustee to take over upon your passing. It is also possible to create an SNT as a testamentary trust, the terms of which are included in your will.
Self-Settled or First-Party SNTs: This trust would be an option when a disabled individual receives a large sum through a personal injury lawsuit, divorce case, workers’ compensation benefits, gift, or inheritance. The beneficiary receives the funds directly, but it is a parent, guardian, or court that creates the trust on his or her behalf. This maintains the separation of ownership necessary to qualify for public assistance.
Important Point on Third- Versus First-Party SNTs: You should be aware of what happens upon the death of the beneficiary since the implications are vastly different.

With a self-settled trust, the proceeds must first be applied to repay Medicaid for total lifetime medical assistance benefits. After reimbursement, the trust balance can be distributed to other beneficiaries.
With a third-party trust, the one you would create in the context of estate planning, there is no Medicaid repayment.

Count on a Knowledgeable Lawyer for Assistance

The initial focus of our Hamilton special needs trusts attorneys will be analyzing your circumstances and consulting with you on SNT options that meet the needs of your family. We will also prepare the essential documents and walk you through each provision, making sure you understand your duties if you name yourself as trustee.

Your role as a trustee is fundamental to making sure your loved one gains the benefits of creating an SNT. You are in charge of distributions, so you must ensure they comply with the laws and do not disqualify the beneficiary. Our lawyers at Scott Counsel, P.C. will advise you, but the following may qualify as allowable expenditures from an SNT:

Medical costs not covered by Medicaid;
Clothing, furniture, and personal needs;
School, camp, education, entertainment, travel, and activities;
Costs related to maintaining a residence, including mortgage and insurance;
Renovations to the beneficiary’s home or vehicle, to improve accessibility;
Telephone, cable, heat, electricity, and other utilities.

A Hamilton Special Needs Trusts Lawyer Will Assist with Planning

From planning and execution of the proper documents to advice on ongoing management, the team at Scott Counsel, P.C. is prepared to guide you with special needs trusts. For more information on our legal services, please contact our office at (856) 672-7248 or visit our website. We are happy to set up a consultation with a New Jersey special needs trusts attorney. After learning more about your situation, we can explain options that align with your estate planning goals.

Nancy

– When my son, who has Cystic Fibrosis and CF related diabetes, was suddenly and unexpectedly removed from his Medicaid program, we were devastated and frightened not knowing where we would get the resources to pay for his extremely high priced prescriptions. Justin was the attorney who handled our case. From the very beginning, he proved to be very thorough and experienced with navigating the process of reversing the Medicaid decision. However, it was his apparent kind, caring nature that made us feel the most at ease. Justin was successful in securing a continuation of benefits for my son, and we are extremely grateful for having his expertise during this most stressful ongoing process. Thank you, Justin!