The Advantages of Using a Special Needs Trust in New Jersey
Advantages for the Trust Beneficiary
I think a Special Needs Trust is terrific when used in the right circumstances. But the operative words are “the right circumstances”. Here’s why I like a Special Needs Trust.
Eligibility for New Jersey Government Assistance
If the individual is already receiving government assistance benefits, he or she will continue to receive an uninterrupted flow of services with no disruption or threat to the individual’s well-being. If the individual is just applying for benefits, then initial eligibility can be attained because the special needs trust will prevent the assets from being counted in the application process.
The Advantages of a Special Needs Trust
Reduced Costs to the Disabled Person and His/Her Family
When medical providers contract with the State of New Jersey to provide Medicaid services, they agree to deliver those services at a significantly lower cost than if the beneficiary had to pay privately by spending down. Even if the special needs trust must eventually reimburse the State for services provided over the beneficiary’s life time, reimbursement will be for this lower cost and will be free of any penalties or interest. That’s a tremendous savings to the individual and his/her family.
A Supplemental Needs Trusts Can Protect an Inheritance and Pass on Family Assets to the Next Generation
Because the trustee has discretion over disbursements made from the trust, the beneficiary has only an indirect right to receive trust funds. Trust funds are used for his/her supplemental needs which increases his or her quality of life. Some examples of items that can be purchased to help the beneficiary’s quality of life include the following:
- Supplemental funding of housing costs (i.e. rent) and contributing towards shared or private rooms in a group home or institutional setting.
- Medical procedures or therapies not provided through Medicaid or other medical government assistance.
- Supplemental nursing care and private companion services.
- Geriatric care services.
- Travel expenses.
- Entertainment expenses such as concerts, stereo, and other electronic equipment, including a personal computer, an X-Box and/or Playstation. You can even subscribe to Netflix.
- Guardian Fees.
- Legal Fees and costs.
- Any other reasonable expense, service, or product not provided by the individual’s government assistance program.
Maximizing the Benefit of a Structured Settlement in a New Jersey Special Needs Trust
In personal injury actions, combining a special needs trust with a structured settlement can provide a second level of protection for the beneficiary. The first level of protection is provided through the structured settlement’s ability to shield the settlement proceeds from the undue influence of new-found “friends”, economically distressed family members, as well as from any of the beneficiary’s own spendthrift propensities. Additionally, the special needs trust can provide a second level of protection by receiving the structured payments in such a way as to preserve eligibility for government assistance. In turn, this allows the structure’s periodic payments to be maximized to the greatest extent possible.
Availability of Choices for the Beneficiary For Medical Care
The beneficiary can use Medicaid and/or make arrangements with the trustee to pay for medical services not covered by Medicaid. This includes payments to a specialist who doesn’t accept Medicaid payments. Maybe there are expenses or experimental drugs that will help the person’s overall health but these drugs are cost prohibitive or insurance considers them experimental. The important point is that the trustee has the legal ability to make such purchases and approve trust expenditures for these reasons.
Avoidance of the Need for a Guardianship
A Special Needs Trust in New Jersey is traditionally recognized as an appropriate vehicle for providing fiscal management in a variety of settings. When appropriate, a SNT can also avoid the need for a guardian of the property because trusts are also recognized as a less restrictive means to guardianship. In such circumstances, a special needs trust can save the beneficiary from payment for the ongoing costs and formalities of maintaining a guardianship in addition to preserving eligibility for government assistance.
Think a SNT will benefit you or someone you know? Call my office today. Ask for me to personally discuss the benefits of a Special Needs Trust in New Jersey.
Call me toll-free at (855) 376-5291 or e-mail me at firstname.lastname@example.org.
I look forward to meeting with you.
Written by Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a New Jersey Special Needs Trust Attorney