Can a Guardian Transfer Assets of a Disabled Person Into a Special Needs Trust Without Going to Court

HNW Elder Law, Guardianship Law, Special Needs Trusts for Minor Children and Adults

By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold Township, Monmouth County New Jersey Guardianship and Special Needs Attorney

Recently a family member met with me about an issue she was experiencing as a guardian to her disabled SSI adult niece. She was told she could establish a Special Needs Trust as Guardian but the “transfer of assets into the trust” must be done pursuant to a court order.

In this case the person was in urgent need of Medicaid to cover her significant medical costs. The Aunt is concerned that getting court approval delays the process even more. To me the law is clear. Federal statute permits a guardian to establish a first party special needs trust but New Jersey’s guardianship statutes require that a trust created and funded with the ward’s assets can only be established upon approval of the court. The transfer of assets from the guardianship account to an irrevocable trust is tantamount to a “gift” to the trust, which has a trustee who is not the guardian. My interpretation of NJSA 3B:12-49 is that the trustee could theoretically be someone other than the guardian because guardians are almost always bonded and subject to the jurisdiction of the court while a trust and trustee are not.  Because of this, it seems reasonable to require the guardian to seek a judge’s approval so the interest of the beneficiary are best protected.

Contact me personally today to discuss your New Jersey Guardianship matter.  I am easy to talk to, very approachable and can offer you practical, legal ways to handle your concerns.  You can reach me toll free at (855) 376-5291 or e-mail me at fniemann@hnlawfirm.com.

 

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