Recently, I met with new clients who are grandparents to many grandchildren, one of which is special needs. I was asked if Medicaid will be able to take whatever funds are left over in the grandchild’s trust if he receives public benefits. They want to create a special needs trust for their grandchild since he is not expected to live beyond 30 and is seriously disabled. They are hoping any money left over at that time can be distributed to their other grandchildren and not taken by the government. Let me be clear with my answer. There will be no Medicaid payback required if you create, fund and establish a special needs trust. In other words, you can fund this …
Oh No, I’m Getting Money; Now What Do I Do?
I get quite a few calls from attorneys who have settled cases or obtained judgments in favor of their clients to compensate them for pain and suffering resulting from slip and falls, car accidents, medical malpractice etc. The amount recovered might be small, say $10,000.00. In other cases, it can be substantial, say $1,000,000.00 or more. In each case the attorneys have brought the matter to a successful conclusion, no doubt getting the very best result they can for their client. So, why are they reaching out to me? The reason is that in many cases their clients are receiving “needs based” government benefits; an example, Medicaid. Receipt of settlement money will in each case cause their client to lose …
Can a Guardian Transfer Assets of a Disabled Person Into a Special Needs Trust Without Going to Court
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 …
Funding a Special Needs Trust in New Jersey
By Fredrick P. Niemann, Esq. a New Jersey Special Needs Trust Attorney If you are contemplating the creation of a Special Needs Trust, it is likely that a number of issues will arise with respect to how much money to fund the trust. First, how much money will your child with special needs require over his or her life? Second, should you leave the same portion of your estate to all of your children, no matter what their need(s)? The first question is a difficult one. It depends on the assumptions you make about your child’s needs and the availability of other resources to fulfill those needs. A financial planner or life care planner with experience in this area can …
Advising Trustees of Special Needs Trusts (SNT) on What They Can and Cannot Spend Trust Funds For
By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold, NJ Special Needs Trust Attorney Special Needs Trusts for disabled and handicapped persons are often created with funds received from legal settlements or inheritances. These Trusts are important legal documents when established for people who are receiving government benefits because they protect these benefits from mandatory spending. However, a trustee must also make distributions in accordance with the guidelines of the trust so as not to risk loss of Supplemental Security Income (SSI) or Medicaid benefits for the beneficiary. Special Needs Trust payments are designed to “supplement payment of expenses” or luxury needs not provided by government benefits. SNT funds are not intended to be used for basic …
SSA Clarifies Its Position on Court Established (d)(4)(A) Trusts
By Fredrick P. Niemann, A New Jersey Special Needs Trust Attorney After much criticism, the SSA has issued an Administrative Message clarifying its policy regarding (d)(4)(A) Special Needs Trusts created by court order. Recently, some SSA offices have been refusing to approve court-established (d)(4)(A) trusts because they were not created by a court “order.” The SSA has now issued an Administrative Message. The message states that “[i] in the case of a special needs trust established through the actions of the court, the creation of the trust must be required by a court order. The special needs trust exception can be met when courts approve petitions and establish trusts by court order. When the court issues an order approving the …
DO NOT PAY SOME TYPES OF EXPENSES WHEN ADMINISTERING A SPECIAL NEEDS TRUST IN NEW JERSEY
By Fredrick P. Niemann, Esq. a New Jersey Special Needs Trust Attorney Check the distribution standard in the trust If the beneficiary of your special needs trust is on SSI and/or Medicaid, does the distribution standard written in the trust allow the trustee to make distributions which will cause a reduction in government benefits? If the trust distribution standard does not allow the trustee to make distributions which will reduce SSI benefits, then as the trustee you cannot make any distributions for in-kind support and maintenance, which includes food, rent, room, mortgage, property taxes, insurance, electricity, heating fuel, gas, water, garbage collection, and sewer charges. Having the ability to pay some of these expenses as in-kind support and maintenance can …
SPECIAL NEEDS TRUSTS UPHELD IN RECENT FEDERAL CASE
By Fredrick P. Niemann, Esq. a Special Needs Trust Attorney Recently, a United States Court of Appeals decided a case involving a “special needs trusts.” A special needs trust is one of two trusts that the federal Medicaid Act created. A special needs trust or “SNT” is a trust that permits a disabled person to continue to receive Medicaid benefits and have money in the SNT for his benefit. A disabled person might want to create a special needs trust after he receives an award in a lawsuit. For instance, a person might be disabled because he was in a car accident. After the accident, he may sue the person who caused the accident and receive money as a result …
Using a Special Needs Trust to Protect A Personal Injury Settlement and Public Benefits
By Fredrick P. Niemann, Esq., NJ Special Needs Trust Lawyer Personal injury attorneys and their clients should avoid receiving payment from a defendant or the defendant’s insurer into the attorney’s trust account for any funds that are intended to be placed into a special needs trust. Payment of funds to the plaintiff’s personal injury attorney constitutes “constructive receipt” by the person with a disability. Therefore, checks from the defendant should be made payable directly to the trustee of the special needs trust. Constructive receipt by the beneficiary can cause a loss of public benefits because the SSI income and resource rules have been violated. When there is a lump sum settlement and the defendant insists on paying the plaintiff’s attorney …
Estate Planning for Parents of Disabled Children Involves Unique Considerations
By Fredrick P. Niemann, Esq., a NJ Special Needs Attorney Any parent of a disabled child is well aware of the daily challenges they are presented with. Caring for a child with special needs involves many unique considerations. Estate planning is arguably the most important of these considerations. Parents want to help pay for as much as they can to assure their children live a happy life and are properly cared for, but want to make sure their children still qualify for the public benefit programs that are available to them. This can be a difficult task, as government assistance programs are based on the amount of assets your disabled child has at their disposal. Therefore, how you decide to …
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