Practical Issues and Considerations in the Use of a NJ Special Needs Trust

By Fredrick P. Niemann, Esq., NJ Special Needs Trust Attorney

There is no Minimum Dollar ($) Amount Necessary to Establish a Special Needs Trust

There is no technical or legal requirement that specifies a minimum amount of money necessary to establish a special needs trust.  However, if the individual comes into possession of any amount over $2,000.00, the receipt of these assets will have a negative effect on his or her public program eligibility.  Whether the individual should create a special needs trust, or spend down the assets on goods or services, is a decision that the individual must make after consultation with competent counsel.  Without regard to the individual’s ultimate decision, a plan of action should be implemented immediately so that program eligibility is not jeopardized in the month the assets are received.

Duty to Notify New Jersey

All recipients of government assistance have an affirmative duty to notify the agency that is responsible for administering their program whenever there is any material change in economic circumstances.  Becoming the beneficiary of a trust is a material change in circumstances, and the individual must provide the agency with a copy of the trust document.  Legal counsel for the government agency will review the trust to see if it meets all of the technical and legal requirements for being treated as a special needs trust and therefore not counted as an available resource.

Estate Recovery Under NJ Law

New Jersey created the Medicaid Estate Recovery Act.  Under this Act, the State has a claim against the Medicaid recipient’s probate and non-probate estate for all Medicaid benefits provided from age 55 forward.  A special needs trust will not escape the application of the Estate Recovery Act.  The requirement that all special needs trusts contain a payback provision ensures that the trustee has an affirmative duty to satisfy the State’s lien at the beneficiary’s death.

Contact me personally today to discuss your New Jersey special needs trust matter.  I am easy to talk to, very approachable and can offer you practical, legal ways to handle your concerns.  You can reach me toll free at (855) 376-5291 or e-mail me at fniemann@hnlawfirm.com.