Special Needs Trusts In New Jersey: An Overview
As part of their estate planning, many families wish to provide money and other assets to loved ones with disabilities. However, without taking the proper legal steps, such a gift can make your family member ineligible for needs-based government benefits such as Medicaid and Supplemental Security Income.
There is a way to provide money to a disabled or incapacitated person without making him or her ineligible for government benefits. At J. Jeffrey Press, P.A., attorney J. Jeffrey Press handles special needs planning for families throughout northern New Jersey.
How Should Your Trust Be Structured?
A special needs trust (also known as a supplemental needs trust) is a device you can use to provide a gift or inheritance to a person who either receives government benefits now or may need these benefits in the future.
If you provide a family member with a gift or inheritance directly, those assets can make your family member ineligible for benefits such as Supplemental Security Income and Medicaid, which are based on financial need. Your family member may be forced to spend down those assets until he or she once again becomes eligible for governmental benefits.
When you provide assets in a special needs trust, those assets will not be owned by your family member. Instead, they will be owned by the trust. The person you name as the trustee will manage the assets and use them to provide money to your family member for clothing, vacations and other supplemental needs not paid for by governmental benefits.