By Fredrick P. Niemann, Esq. a New Jersey Special Needs Trust Attorney
Estate planning for parents of children often involves the creation of what is , called a “third-party” special needs trust. This type of special needs trust serves to protect any inheritance that may come from a grandparent or other family member. However, a third-party special needs trust cannot hold funds belonging to the disabled individual himself. As a general rule, funds held by such a self-settled trust would be considered available to the disabled beneficiary and render him ineligible for Medicaid or SSI. Today, both Medicaid and SSI allow two types of “self-settled” trusts that permit a beneficiary to shelter his own funds, qualify for public benefits, and remain a continuing beneficiary of a trust. A single-beneficiary self-settled trust is generally referred to as a “(d)(4)(A)” trust, referring to its primary feature that any funds remaining in the trusts upon the beneficiary’s death be used to reimburse the State of New Jersey for any Medicaid expenditures it has made on the beneficiary’s behalf. Only if funds remain after such reimbursement may they be passed on to the beneficiary’s family. A “(d) (4) (A)” trust must be created while the disabled individual is under age 65 and must be established by his or her parent, grandparent, legal guardian, or by a court. A “(d)(4)(A)” trust also must provide that at the beneficiary’s death any remaining trust funds will first be used to reimburse the state for Medicaid paid on the beneficiary’s behalf.
Contact me personally today to discuss your estate plan by use of a Special Needs Trust. 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 firstname.lastname@example.org.