Who Should Consider a Special Needs Trust?
Have you already created an estate plan in New Jersey and are wondering about the addition of one or more trusts? Or are you just beginning to think about estate planning and want to find out about creating a trust? Under either circumstance, you might have started looking into the types of trusts that are available in New Jersey, and you may have come across information about Special Needs Trusts (SNTs). This is a very specific type of trust, and it is only appropriate in particular circumstances where the grantor has a disabled loved one for whom they want to provide assets. Accordingly, New Jersey residents should only consider a SNT if they are in this situation. Otherwise, it will be important to speak with a lawyer about other types of trusts.
How can you know if you should consider a Special Needs Trust? Think about your situation in relation to the following information.
You Have a Disabled Loved One
You will only want to consider a SNT if you have a disabled loved one, and you want to be able to provide assets to that individual after you have passed away. It may be a disabled adult child for whom you already provide care, or it might be for another close family member.
Your Disabled Loved One Has a Specific Relation to You
In New Jersey, only particular individuals can establish a SNT for a disabled loved one. The parties who can make a SNT are a parent, grandparent, or guardian (or the court). Accordingly, your disabled loved one for whom you want to establish a Special Needs Trust must be your child, grandchild, or a person for whom you serve as a guardian. Otherwise, you will likely need to consider options other than a SNT to provide for a disabled loved one.
Your Disabled Loved One Has Been Determined to Be Disabled Under Federal Law
In order for a person to be the beneficiary of a Special Needs Trust in New Jersey, that person must have been determined disabled under 42 USC 1382(a)(3)(A). To be eligible for disability benefits under the US Code, a person must meet requirements for having limited income and limited resources. They also must meet the definition of a disability, which means an individual with “a physical or mental impairment that substantially limits one or more major life activities” or “a record of such impairment” or “being regarded as having such an impairment.”
Contact a New Jersey Estate Planning Attorney
If you have a disabled loved one and want to find out more about creating an SNT, it is important to seek legal advice to ensure that the trust has all of the necessary requirements under New Jersey law. One of the experienced New Jersey estate planning attorneys at Dempsey, Dempsey & Sheehan can speak with you about SNTs and other types of trusts in New Jersey, as well as other important aspects of estate planning. Contact us today to find out more about how we can assist you with the creation of a SNT in Summit.
Sources:
nj.gov/humanservices/dmahs/clients/snt.html
nj.gov/humanservices/dmahs/clients/SNT_regulations.pdf
law.cornell.edu/uscode/text/42/1382
law.cornell.edu/uscode/text/42/12102
