Special Needs Trusts and Eligibility in New Jersey

A Narrow Exception to the Means Based Programs

Contrary to the rules in the section above, special needs trusts provide a very narrow exception to the general rules that normally apply to trusts.  More specifically, a properly drafted and administered special needs trust will not be counted as an available asset, and proper trust distributions will not be counted as income.  To receive this special exception, however, the trust must meet certain New Jersey statutory requirements and pass review by the agency responsible for administering the trust beneficiary’s public assistance program.

Importance of Proper Administration of a SNT in New Jersey

While special needs trusts in New Jersey are conceptually simple and provide a narrow exception to the trust rules, the administration of a special needs trust can become very complex.  Administration can become complex because the rules that regulate government assistance programs are complex.  Every special needs trust must be administered to the specific rules of the trust beneficiary’s individual government assistance program.

Flexibility of Special Needs Trusts

The “special needs” that any given trust can provide will always be defined by the technical requirements of each individual’s government assistance program.

Consequently, a particular distribution that does not violate one individual’s program requirements may cause serious problems for an individual receiving benefits from a program with different requirements.  Despite this potential complexity, however, a  properly drafted and administered special needs trust can be very flexible and can be adapted to meet program requirements even as those requirements may change over time.