By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold, NJ Veterans Benefits Attorney
The U.S. Department of Defense will now allow military members and retirees the option to direct payment of a survivor benefit plan annuity for a dependent child to a SNT for the benefit of the disabled child when they elect that dependent child as a SBP beneficiary (the statute does not apply to disabled spouses). A SNT is a legal instrument specifically designed solely for the benefit of a person with a disability by providing a set of instructions for managing money set aside to help a disabled person. Unlike many other types of trusts, a SNT is governed by New Jersey State Law. In accordance with the SBP statute, a SNT must always be written in accordance with Federal statute. In addition, once created, it must be irrevocable.
As a result of the legislation, a military member or retiree who elects SBP coverage that includes coverage for a dependent child may now, at any time, irrevocably decide to substitute a SNT created for the benefit of a disabled dependent child as the SBP beneficiary to receive any SBP annuity payments that would otherwise be payable to or on behalf of the disabled dependent child. This irrevocable decision may be made during the life of the member through a written statement that designates future SBP payments to the SNT.
If the SNT is found to be invalid or otherwise fails, then payment of the SBP annuity shall revert back to being made directly to the dependent child. If this occurs, the dependent child’s entitlement to other Federal benefits such as Supplemental Security Income and Medicaid may be impacted. Since there are serious consequences if a SNT is found to be invalid, those seeking to have a SNT created need to exercise due diligence to ensure that they consult with an attorney well-versed in this specialized and complex area of law.
To discuss your NJ Veteran Benefit matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at email@example.com. Please ask us about our video conferencing consultations if you are unable to come to our office.