IRA and a Special Needs Trust
An individual retirement account or Inherited IRA can be owned by a person with a disability and also be transferred to a d4A Special Needs Trust before the person with the disability turns 65. Moving an IRA owned by the disabled person almost always takes two steps: (a) get a court order to create the trust and transfer the asset to the trust, and then (b) go back to the court and get the exact wording in the order that the retirement plan administrator requires for the transfer. I always advise a client to try to get a hold of the plan administrator to discuss exactly what language is needed before we go to court for the d4a application. We usually have to go back to court because either the client doesn’t do it, or they don’t get the right information. However, in the end, it winds up being successful.
Child Support and a Special Needs Trust
Child support can only paid to a d4a trust and requires a court order to get it.
Child support ordered into a d4a does not reduce SSI by a penny as long as the SSI is not available for food, closing, or shelter.
Pensions and a Special Needs Trust
Pensions are a big problem. If a family member of a person with a disability makes them the beneficiary of a pension, we can have a problem with eligibility for government benefit programs. There are two exceptions and one maybe-exception: firefighter’s pension and police pensions may be assignable to a d4a trust or a third party, and (potentially) a port authority pension may be assignable to a third party Special Needs Trust. This is important, because for example, an Asbury Park Press pension isn’t assignable and will pay to the person with the disability, and we then have a huge eligibility problem. These are real examples, not hypotheticals.
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 Attorney