- State and federal law generally requires that all payments from a trust exclusively benefit the disabled person.
Disbursements made from a Special Needs Trust for a pet(s) owned by a qualified disabled person does not violate the sole benefit rule and therefore, should not jeopardize a beneficiary’s Supplemental Security Income (SSI) or Medicaid. However, New Jersey has not updated its Administrative Code to reflect this change of law at the federal level under POMS Sl 01130.430. Federal Social Security Regulations override any state rules with respect to eligibility for Medicaid and SSI benefits, especially regarding a Special Needs Trust.
The NJ Administrative Code currently reads as follows:
N.J.A.C. § 10:71-4.11 Trusts
(e) Treatment of trust, for purposes of determining Medicaid eligibility, shall be dependent on the characteristics of the Trust. The look-back period for evaluation of resource transfer shall be 60 months. The following are the rules for consideration of various kinds of trusts.
Payments made from a revocable or irrevocable trust to or on behalf of the individual shall include payments of any sort, including an amount from the corpus or income produced by the corpus, paid to another person or entity such that the individual derives some benefit from the payment. For example, such payments may include purchase of clothing or other items, such as a radio or television, for the individual. Such payments may also include payment for services the individual may require, or care, whether medical or personal, that the individual may need. Payments to maintain a home shall also be considered payments for the benefit of the individual.
When a payment to or for the benefit of the individual is made which would not be considered income in the eligibility process, then the payment shall not be counted as income to the individual under this section. For example, payments made on behalf of an individual for medical care are not counted in determining income eligibility for Medicaid, and are therefore not counted as income under these trust provisions.
In our specific case, the client has been diagnosed as having chronic major depressive disorder and anxiety. Her pet is therapeutic and helps alleviate her anxiety symptoms in light of her diagnosis and isolation so it is certainly arguable that any disbursements from the trust for the pet are for her benefit.
To discuss your NJ Special Needs Trust matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at firstname.lastname@example.org. Please ask us about our video conferencing consultations if you are unable to come to our office.
By Fredrick P. Niemann, Esq., of Hanlon Niemann & Wright, a Freehold Township, Monmouth County NJ Special Needs Trust Attorney