Special Needs Trust Attorney in New Jersey

Protecting Your Loved One’s Future

Are you concerned about providing for a loved one with special needs while preserving their eligibility for essential government benefits? At the Law Firm of Benjamin Eckman, we understand the unique challenges faced by families caring for individuals with disabilities. Our experienced special needs trust attorneys can help you navigate the complex legal landscape to ensure your loved one’s financial security and quality of life.

A Special Needs Trust (SNT), also known as a “supplemental needs trust,” is a specialized legal arrangement designed to benefit individuals with disabilities while preserving their eligibility for crucial government assistance programs like Supplemental Security Income (SSI) and Medicaid.

Without proper planning, direct inheritance or gifts to a person with disabilities can disqualify them from receiving these essential benefits. Government programs like Medicaid and SSI have strict income and asset limits. Once an individual exceeds these thresholds—even temporarily—they may lose access to healthcare, housing assistance, and income support.

A properly structured Special Needs Trust allows assets to supplement, rather than replace, government benefits. This supplementation can significantly enhance your loved one’s quality of life by providing funds for expenses not covered by public assistance programs.

Types of Special Needs Trusts in New Jersey

New Jersey recognizes several types of Special Needs Trusts, each serving different purposes depending on the source of funding and specific circumstances:

First-Party Special Needs Trusts: These trusts are funded with assets belonging to the disabled individual, such as personal injury settlements, inheritances received before proper planning, or accumulated savings. Under federal law, these trusts must include a “payback provision” that reimburses the state for Medicaid benefits upon the beneficiary’s death.

Third-Party Special Needs Trusts: Established and funded by someone other than the disabled person (typically parents, grandparents, or other family members), these trusts offer greater flexibility. Unlike first-party trusts, third-party SNTs do not require Medicaid payback provisions, allowing remaining assets to pass to other family members after the beneficiary’s death.

Pooled Special Needs Trusts: Managed by nonprofit organizations, these trusts pool resources from multiple beneficiaries for investment purposes while maintaining separate accounts for each individual. Pooled trusts can be an excellent option for smaller asset amounts or when suitable trustees are unavailable.

Benefits of Creating a Special Needs Trust

Establishing a Special Needs Trust offers numerous advantages for both the beneficiary and your family:

• Preserves eligibility for essential government benefits like SSI, Medicaid, housing subsidies, and food assistance
• Protects assets from being “spent down” before qualifying for benefits
• Provides financial security for your loved one’s future needs
• Funds quality-of-life enhancements not covered by government programs, such as education, recreation, travel, electronic devices, and personal care items
• Offers protection for vulnerable adults who cannot manage finances independently
• Creates peace of mind knowing your loved one will be provided for after you’re gone
• Establishes professional management of assets when appropriate

How Attorney Benjamin Eckman Can Help

At the Law Firm of Benjamin Eckman, we bring extensive experience in Elder Law and Estate Planning to create comprehensive special needs planning solutions. Our approach includes:

• Personalized assessment of your loved one’s current and future needs
• Expert guidance on selecting the most appropriate trust structure
• Careful drafting of legally sound trust documents that comply with all federal and New Jersey state requirements
• Integration of your Special Needs Trust with your overall estate plan
• Coordination with financial advisors and other professionals
• Ongoing support to trustees and families throughout the administration process

Our deep understanding of Medicaid and Social Security regulations ensures that your Special Needs Trust will effectively protect your loved one’s benefits while enhancing their quality of life.

When to Consider a Special Needs Trust

Several life circumstances may trigger the need for a Special Needs Trust:

• When a child with disabilities approaches adulthood (age 18), as this is when many benefit eligibility determinations occur
• After receiving an inheritance or legal settlement that could disrupt benefits
• When planning your estate for a disabled beneficiary
• Before your special needs child turns 65, as certain planning options become limited after this age
• As part of comprehensive long-term financial planning for your family
• When a previously independent adult becomes disabled and needs benefit protection

The earlier you begin planning, the more options you’ll have available. Proactive planning provides greater peace of mind and financial security for your loved one.

The Process of Creating a Special Needs Trust

At the Law Firm of Benjamin Eckman, we’ve developed a streamlined process for establishing effective Special Needs Trusts:

1. Initial consultation to understand your specific situation and goals
2. Comprehensive assessment of your loved one’s current and anticipated future needs
3. Detailed review of available government benefits and how to preserve eligibility
4. Selection of appropriate trust structure based on your unique circumstances
5. Guidance on trustee selection to ensure proper administration
6. Drafting of legally sound trust documents that comply with all relevant laws
7. Implementation and funding strategy development
8. Coordination with other professionals as needed (financial advisors, accountants, etc.)
9. Ongoing support for trustees and families

Our goal is to make this complex process as straightforward as possible while ensuring your loved one receives maximum protection.

Choosing the Right Trustee

Selecting the appropriate trustee is one of the most critical decisions in establishing a Special Needs Trust. The trustee will be responsible for:

• Managing trust assets
• Making distribution decisions
• Maintaining detailed records
• Filing tax returns
• Ensuring compliance with benefit regulations
• Advocating for the beneficiary’s needs

When selecting a trustee, consider these factors:

• Financial knowledge and responsibility
• Understanding of government benefit rules
• Relationship with the beneficiary
• Age and health (for individual trustees)
• Willingness to serve long-term
• Potential conflicts of interest

Options include family members, professional trustees (banks or trust companies), or a combination of both as co-trustees. Attorney Benjamin Eckman can help you evaluate these options and make the best choice for your situation.

8 Common Mistakes to Avoid When Setting Up a Special Needs Trust

When establishing a Special Needs Trust for a loved one with disabilities, avoiding common pitfalls is crucial to ensure the trust effectively serves its purpose:

Improper Trust Structure and Selection

Choosing the wrong type of trust is a fundamental error that can have serious consequences. Special needs trusts come in different forms—first-party (funded with the beneficiary’s assets) and third-party (funded by parents or relatives). Selecting the inappropriate type can directly impact eligibility for government benefits. Additionally, failing to make the trust irrevocable can make assets available to the disabled person, causing them to lose government benefits.

Trustee Selection Issues

One of the most significant mistakes is appointing an inexperienced or unsuitable trustee. The trustee must have:

• Financial knowledge
• Understanding of government benefit rules
• Ability to act in the beneficiary’s best interests

Many families mistakenly name a family member as trustee despite their lack of knowledge about these complex trusts. Consider using a professional trustee or co-trustees to ensure proper administration.

Funding Problems

Failing to fund the trust properly is another critical error. This includes:

• Not funding the trust with sufficient money to cover the beneficiary’s needs
• Setting up a trust but not directing assets like life insurance or inheritance to it
• Giving assets directly to the beneficiary, which could disqualify them from government benefits

Professional Guidance Shortfalls

Many people make the mistake of not hiring skilled professionals to help establish their Special Needs Trust. These trusts are complex and nuanced with many moving parts. Attempting to create a trust without professional guidance (the “DIY route”) can lead to costly mistakes.

Administrative Oversights

Several administrative errors can undermine a Special Needs Trust:

• Not naming a successor trustee who will take over management if the original trustee cannot continue
• Failing to update the trust regularly, especially when there are substantial life changes
• Not following the terms of the trust, which could potentially invalidate it
• Not providing detailed instructions on how funds should be used

Timing Issues

Procrastination is one of the most common mistakes. Many people wait too long to create a Special Needs Trust, assuming they have plenty of time. However, unexpected events can occur, leaving your loved one without financial protection if you haven’t established the trust.

Misconceptions About Eligibility

Some people mistakenly believe Special Needs Trusts are only for minor children with disabilities. In reality, these trusts can be created for adults as well, including those who became disabled in adulthood.

By avoiding these common mistakes and working with experienced professionals, you can create a Special Needs Trust that effectively protects your loved one’s financial future while preserving their eligibility for essential government benefits.

Contact Attorney Benjamin Eckman

Don’t leave your loved one’s financial future to chance. The Law Firm of Benjamin Eckman is dedicated to helping New Jersey families create effective Special Needs Trusts that provide security and enhance quality of life while preserving essential benefits.

Schedule a consultation today to discuss your specific needs and concerns. Our compassionate approach and extensive experience in special needs planning can provide you with the guidance and peace of mind you deserve.

Click the button below and schedule a consultation to take the first step toward securing your loved one’s future.