March 13, 2017

Most parents of special needs children understand that taking action steps to plan for the future is imperative. One of the most common ways to do this is by working with an experienced estate planning lawyer to put together a special needs trust. Beyond the basic terms of the trust, designed to protect a loved one with special needs years down the road if something happens to you, it’s important to think about the end game as far as the administration of that trust, too.

The purpose behind such a trust is to supplement benefits given by the government and to make assets inside the trust last as long as possible. Family members may sometimes be the trustee of such a trust. However, this does not always mean that such a person is familiar with the aspects of administering this trust.

Administration of this trust in line with state and federal laws is important because it could otherwise exclude the beneficiary from the government benefits he or she needs. For example, Medicaid eligibility regulations in New Jersey will only allow individuals to exclude money from the resource test to get that benefit if that money is inside a special needs trust.

In New Jersey, the state has to get advance notice of expenditures from the trust that exceed $5,000. Understanding these rules and ensuring proper compliance at all times is extremely important when actions are taken on behalf of a special needs person. Consulting with a lawyer who has experience putting together special needs trusts is strongly recommended.