Understanding the Requirements Imposed by Law for the Administration of a Special Needs Trust
How often have we heard “The devil is in the details”? This cliche holds true for a special needs trust. A properly drafted special needs trust, when administered correctly, will preserve and protect public benefits and will not be considered a disqualifying resource or income source. To receive this special exemption, however, the trust must meet certain statutory requirements and pass review by a state agency and the Social Security Administration, which jointly are responsible for the regulation and approval of a beneficiary’s public assistance program(s).
The Importance of Proper Administration of a SNT in New Jersey
While special needs trusts in New Jersey are conceptually simple, their administration can become complex because the rules governing each government assistance program change over time. Therefore, each special needs trust must be administered according to the specific rules of the beneficiary’s government benefit(s) programs. (Medicaid vs. Section 8 vs. DDD vs. SSI vs. Pharmaceutical Assistance, vs. CCW, etc.)
While a distribution of income or corpus from a SNT may not violate a person’s program requirements, it may still be considered a violation of NJ Medicaid regulations, and it can cause a loss of services. Despite its potential complexity, a properly drafted and administered special needs trust can provide the trustee with flexibility and be adapted to meet program requirements, even as those requirements change over time.
Let us help you navigate the maze of special needs trust administration. At Hanlon Niemann & Wright, we have developed a comprehensive system to assist trustees in their administration of a SNT to avoid program disqualification and penalties
Please call my office today to schedule a personal discussion of your New Jersey Special Needs Trust at (732) 863-9900 or by email at fniemann@hnlawfirm.com.