Estate Planning for Parents with a Disabled Child
Do you have a disabled child? If so, it is especially important for you to discuss your child in connection with your estate plan with an estate planning attorney in Summit. There are many common misunderstandings about estate planning, including the misconception that its only purpose is to identify beneficiaries to receive your assets upon your death. In fact, the function of estate planning is much broader, allowing you to make important decisions about your own finances, health care, and other matters during your lifetime, as well as important decisions concerning your children and their financial well-being.
For parents with a disabled child, it is extremely important to consider the creation of a Special Needs Trust (SNT) that will be able to provide for their child in their child’s adult years. Our New Jersey estate planning lawyers can explain in greater detail.
Understanding Special Needs Trusts
Special Needs Trusts, or SNTs, can be established by a parent, grandparent, or guardian of a disabled child for the disabled child’s benefit. These types of trusts are extremely important for disabled adults who rely on public benefits such as Medicaid and Supplemental Security Income (SSI). When a disabled adult is named as the beneficiary of a SNT, that disabled adult can receive benefits from the trust without having their eligibility for public benefits — which are based on having limited income and assets — impacted.
For parents with a disabled child, establishing this type of trust can help to ensure that the child has the care they need even if the parents are no longer here and able to provide that care themselves. You can establish this type of trust whether your disabled child is still a minor or has already become an adult.
How to Establish a Special Needs Trust in New Jersey
SNTs must be established as irrevocable trusts, and they must be for the sole benefit of the disabled adult. In addition, these types of trusts must be set up so that, upon the death of the SNT beneficiary, the State of New Jersey becomes the remainder beneficiary for the purposes of the state recovering Medicaid payments made on behalf of the SNT beneficiary.
Transfers can be made to the SNT up until the SNT beneficiary reaches the age of 65. To find out more about setting up this type of trust for your child or grandchild, you should seek legal advice from an attorney who regularly handles trusts and estates matters in New Jersey.
Contact a Summit, New Jersey Estate Planning Lawyer Today for Assistance
Having a disabled child often means that parents worry about the child’s future and how the child will be cared for once the parents are gone. Creating a Special Needs Trust in New Jersey is an important and often crucial way that parents can provide financial support for a disabled child once they reach adulthood without affecting the child’s eligibility for necessary public benefits. Whether your disabled child is still young or is already an adult, one of the experienced Summit estate planning attorneys at Dempsey, Dempsey & Sheehan can speak with you today about establishing a SNT for the benefit of your child. Contact our firm to find out more about how we can assist you.
Sources:
law.justia.com/codes/new-jersey/title-3b/
nj.gov/humanservices/dmahs/clients/snt.html
