What is probate in New Jersey, and why can it be a problem for families with a loved one with special needs?

Probate is the legal process of validating a will and distributing a person’s assets after death. In New Jersey, this process can take months and involve costly filing fees, court appearances, and delays—all of which can reduce the funds available for a loved one’s care. For families with a special needs member, these delays and expenses can have a direct impact on their quality of life and access to essential services.

How does a special needs trust protect government benefits like Medicaid or SSI?

A special needs trust is designed to hold funds for a person with disabilities without those funds counting against strict income and asset limits for government benefits. By keeping assets in the trust rather than in the beneficiary’s name, programs like Medicaid and Supplemental Security Income remain intact. At the same time, the trust allows funds to be used for needs such as therapy, education, personal care, or even travel.

What’s the difference between a first-party and a third-party special needs trust in New Jersey?

A first-party trust is funded with assets that belong to the person with special needs, such as an inheritance or settlement. These trusts typically require a “payback provision,” meaning any remaining funds after the beneficiary’s death must reimburse the state for benefits used. A third-party trust is funded by someone else—like a parent or grandparent—and does not require payback, making it an important tool for family estate planning.

What is a pooled trust, and when might it be used?

A pooled trust is managed by a nonprofit organization and combines the assets of multiple beneficiaries for investment purposes, while still keeping individual accounts for each person. This type of trust can be funded by either the disabled individual or a third party and is often an option when no suitable individual trustee is available. Pooled trusts can be especially helpful for smaller amounts of assets, where the cost of a separate trust might not be practical.

Why is choosing the right trustee so important?

The trustee is responsible for managing the trust assets, ensuring funds are spent for the beneficiary’s benefit, and protecting eligibility for public benefits. A family member can be chosen if they are financially knowledgeable and committed, but a professional trustee offers specialized skills in navigating complex benefits rules and investment management. The right trustee choice ensures continuity, compliance, and stability for the beneficiary over the long term.

How can a special needs trust help with expenses beyond basic care?

While government benefits cover essentials like food, housing, and certain medical costs, they do not cover many quality-of-life expenses. A special needs trust can pay for personal items, recreational activities, specialized therapies, educational programs, and travel. These extras can make a profound difference in the comfort, dignity, and happiness of the person with special needs.

What tax and fee considerations apply to a special needs trust in New Jersey?

Special needs trusts are separate taxpayers and often require their own IRS Form 1041 and state fiduciary returns. They may qualify for the Qualified Disability Trust exemption, which can reduce tax burdens. Trustees are also entitled to commissions under New Jersey law, so it’s important to manage distributions strategically to minimize taxes and fees while preserving benefits eligibility.

How can Matus Law Group help me create a special needs trust?

At Matus Law Group, we combine decades of estate planning experience with a personal understanding of special needs challenges—many of us are parents or advocates ourselves. We guide you through every step: selecting the right type of trust, choosing a trustee, drafting clear instructions, and aligning the plan with public benefits rules. Our goal is to create a customized plan that safeguards your loved one’s future while bringing you peace of mind today.

How do I contact Matus Law Group for a consultation?

You can reach Matus Law Group by calling (732) 281-0060 to schedule a consultation at either our Monmouth County or Ocean County offices. Our friendly team will take the time to understand your family’s needs and explain your legal options in plain language. Whether you’re ready to start your trust now or just exploring possibilities, we’re here to listen and guide you toward lasting security.

New Jersey Special Needs Trust Attorney - The Matus Law Group

Q: What is the difference between a special needs trust and a supplemental needs trust?

While often used interchangeably, a supplemental needs trust is typically funded by a third party and avoids the government “payback” requirement after the beneficiary’s death. A special needs trust, in its strict definition, is usually funded with the disabled individual’s own assets and does require repayment to the state for benefits received. Understanding the distinction helps families choose the right structure for their situation.

At Matus Law Group, We Understand Special Needs Trusts in New Jersey

You have spent years building a life you’re proud of. Now you want to know that the people you love, especially a child or relative with special needs, will be protected when you are gone. A clear estate plan gives you that peace of mind.

Probate in New Jersey can take months and cost plenty. Every filing fee, court appearance, and delay can chip away at the funds your family member depends on for care. The easier path is to set clear instructions now, so your wishes are carried out without unnecessary cost or confusion.

That’s where Matus Law Group comes in. For more than twenty years, our team has guided families across the state on financial planning for special needs parents and caregivers. When you work with an NJ special needs trust attorney from our firm, you can get straight talk, practical steps, and documents that work in the real world.

Christine Matus, a parent of a child with special needs herself, leads the firm with heart. Our team is conveniently accessible from our Monmouth County or Ocean County offices and speaks your language, not legal jargon. We can tailor your plans to accommodate for programs such as the Individuals with Disabilities Education Act (IDEA) allowing your plan to fit the bigger picture of your loved one’s care and education.

Your family’s future matters. Let’s sit down, review your goals, and craft a special needs trust that protects what you have built. Reach out to Matus Law Group today and take the first step toward lasting security.

Call now to make an appointment and discuss special needs planning in New Jersey (732) 281-0060.

We Are Here To Help:

Attorney Christine Matus (a special needs parent herself) and the entire team at Matus Law Group are here to help protect your family’s future today.

Call now to make an appointment and discuss special needs planning (732) 281-0060.

Why Set Up A Special Needs Trust In NJ?

If you provide care for a loved one with a disability, you probably think about their future every day. Thinking about money, benefits, doctors, and daily care all at once can feel overwhelming. This is where the advice and guidance of a special needs attorney in New Jersey becomes important.

Leaving money outright might seem kind, yet it can backfire fast. Extra cash in your loved one’s name may push them over strict income and asset limits and cost them vital programs like Medicaid or Supplemental Security Income. A special needs trust stops that from happening. It holds the funds, protects government benefits, and still lets you pay for therapy, education, or travel. You pick the trustee, you set the rules, and the trust keeps looking after your family member long after you’re gone.

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Special needs trusts may be funded by a variety of sources including:

Cash
Property
Life insurance
Investments
Retirement benefits
Personal injury settlements

You can fund a trust for your family member’s needs without disqualifying them from the other public services and benefits that they rely on. A special needs trust will allow the surviving family member to:

Keep their government benefits through Social Security, Supplemental Security Income, and Medicaid.

Pay for personal need items that are not covered by these benefits

Pay for medical professionals, therapists, dentists, and other professionals who are not covered by other benefits or who do not accept public benefits.

Before making any decisions, it’s best to talk to an experienced special needs lawyer. The Matus Law Group is always here to help answer your questions. If you are looking for special needs planning, allow us to help.

Call today at (732) 281-0060 to schedule a consultation with a top-rated special needs trust lawyer in NJ.

NJ Special Needs Trust Attorneys

Christine Matus

A trusted name in New Jersey estate planning, Christine Matus is known for her leadership and legal advocacy for families with special needs. Her career blends decades of experience with passionate community involvement.

Admitted to practice in NJ and U.S. District Court since 1995
Board leadership with 21 Plus, MOCEANS, and Ocean County Bar Association
Frequent speaker on special needs planning and elder law
Legal advisor to numerous Filipino-American community organizations

Kristine Carranceja-Gurski

Kristine Carranceja-Gurski brings a practical and empathetic approach to legal planning, with a unique background in finance and community service that strengthens her special needs advocacy.

Admitted in NJ (2007) and NY (2008)
Founding Chair of Ocean County Bar’s Pro Bono Committee
Former nonprofit executive and legal educator
Active in local school and neighborhood associations

Brayndi Grassi

With a unique background that bridges intellectual property and special needs planning, Brayndi Grassi combines technical insight with a personal connection to her New Jersey community.

Graduate of NYU and New York Law School
Admitted to NJ and NY Bars
Published on copyright and tattoos; speaker at IP law forums
Focused on real estate law and client-centered planning

What Is The Difference Between a Special Needs Trust and a Supplemental Needs Trust?

Today, the terms “special needs trust” and “supplemental needs trust” are often used interchangeably. Although they are similar in intent, which is to set aside funds for the benefit of a disabled person, you should be aware of some important differences.

A supplemental needs trust refers to a trust that is funded by a third party. In the event of the death of the disabled individual, there is no payback required for government programs that the disabled individual used throughout his or her life.

A special needs fund typically refers to a trust that is funded by assets already owned by the special needs individual. After the death of the beneficiary, the government will require the trust to pay back any expenses paid on his or her behalf over the course of their lifetime.

Get in touch:

The Matus Law Group is always here to help answer your questions – if you are looking for special needs planning, allow us to help (732) 281-0060.

Why Does A Special Needs Person Need A Special Needs Trust?

Having a special needs trust in place ensures that your disabled family member has access to assets that help enhance the quality of his or her life while maintaining eligibility for programs such as Supplemental Security Income (SSI) and Medicaid. While these public benefits are essential, they are not extensive.

Special needs trusts can provide a better life not only for individuals who have a permanent immediate need but also for those who have temporary needs or who anticipate that they will have future disabilities. In the case that the beneficiary is sued for any reason, a special needs trust cannot be subject to any judgment and cannot be touched.

Estate Planning With A Special Needs Lawyer

When establishing a special needs trust as part of your estate planning, certain things must be considered.

The New Jersey Division of Medical Assistance and Health Services requires that only certain people or entities may establish a special needs trust.

These are:

The Special Needs Individual
A parent
A grandparent
A legal guardian
The court

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The age of the beneficiary should be considered. A special needs trust must be established and funded before the beneficiary reaches the age of 65. In the case where the beneficiary is a child, the State of New Jersey may require that the trustee sign a bond to protect the funds until the beneficiary reaches the age of adulthood. The trustee must also provide a detailed annual accounting to the Division of Medical Assistance and Health Services (DMAHS) to ensure that the funds are being utilized appropriately.

The choice of a trustee is a highly important matter because of the level of responsibility in the management of the assets and care for the individual. This person should have experience dealing with financial matters and should have the beneficiary’s best interests at heart at all times.

Our experienced attorneys can guide you in choosing the right trustee to execute your estate plan.

Please call to speak with our special needs trust lawyers in NJ today at (732) 281-0060.

Types of Special Needs Trusts in New Jersey

There are three types of classifications of special needs trusts in New Jersey. The classification depends on who funds the assets and how the assets are managed.

Three types of trusts in New Jersey are:

First-party trusts

This trust is established and funded with assets already belonging to the disabled individual.

Third-party trusts

This trust is established and funded with assets that belong to other family members or entities outside of the special needs individual.

Pooled trusts

Also referred to as (d)(4)(C) trusts, these are established and managed by a nonprofit organization.

It’s important to note that an individual who is able to collect Medicare or SSDI may not need a special needs trust since these government programs don’t base eligibility on the amount of money or assets that they have.

Talk to an experienced special needs lawyer to discuss what kind of trust may be right for you. The Matus Law Group is always here to help answer your questions. If you are looking for special needs planning, allow us to help.

Call today at (732) 281-0060.

Trust Type	Funding Source	Medicaid Pay-back Required	Trustee / Management	Age Limit
First‑party trusts	Assets of the disabled individual	Yes	Established by individual, parent, grandparent, guardian, or court; trustee manages trust	Must be established before age 65
Third‑party trusts	Assets from family members or others	No	Grantor appoints trustee; can be part of estate plan	No strict age limit when funded by others
Pooled trusts	Funded by individual or third‑party	Yes	Managed by nonprofit organization; each beneficiary has separate sub-account	Generally for disabled of any age; individual contributions follow under‑65 rule

First-Party and Third-Party Special Need Trusts in NJ

First-party and third-party special needs trusts are distinguished by the source of the assets and whether there is a payback requirement.

A first-party special needs trust is created specifically for use by the disabled party with assets that already belong to the individual. It can be established by the special needs of an individual, parent, grandparent, or guardian, by Power of Attorney, or by the court. If the special needs individual dies while there are still funds in the account, they may need to reimburse the state for government benefits that have been used over the individual’s lifetime. This is called a payback provision.

A third-party trust is one that is funded by assets owned by a family member or another party. The special needs individual may not have any ownership in these funds when it is established; consequently, a third-party trust cannot be established by a spouse.

Third-party trusts can be flexible as to the needs and wishes of the person funding the trust, so they are extremely adaptable to traditional estate Plans.

We Are Here To Help:

To decide if a first-party or a third party is a better fit for your loved one, call to speak with Christine Matus, special needs trust attorney today at (732) 281-0060.

What is a Pooled Trust In New Jersey?

A pooled trust is one that is established by a nonprofit organization to serve a disabled community. The funds are pooled with the assets of other disabled individuals and are invested in a common fund, with each individual maintaining their own account to use for their own economic needs. Participants each have their own sub-trust under the master trust and their own tax ID number.

A pooled trust must be managed by the nonprofit with separate accounts for every individual. Any funds remaining after the death of the individual may be kept by the nonprofit as a charitable donation.

Choosing a Trustee

The selection of a trustee is an important part of creating Trusts. A trustee could be a person, such as a family member, or a corporate entity such as a bank, or another organization. Individual or corporate trustees are entitled to a commission and fees for their services. These fees will be applied to investment accounts and bank accounts owned by trusts in the same way they would apply to personal banking or brokerage accounts. Whether you are looking for a professional trustee or a family member to manage the trust, it is important to understand the difference between the two of them as well as the advantages and disadvantages of hiring them.

It is important to hire an attorney who is experienced in estate planning for persons with disabilities if you are looking for a professional trustee. They can help you create a Special Needs Trust document or a sub-account within a Pooled Trust. A professional trustee monitors financial needs, prepares distributions, and hires a financial manager to invest trust assets. The trust size and projected beneficiary needs will determine the investments made. Some institutions and organizations can serve as professional trustees or provide investment management. SNTs are not always administered by all financial institutions, so make sure you check.

If you want to name a family member to be the Trustee, keep in mind to have an estate planning lawyer draft the SNT for you. Family members who are appointed as Trustees should be familiar with financial matters, willing to learn about SNTs and other public benefits rules, as well as trustworthy enough to manage the funds that have been left to your loved one. The Trustee should ensure that money is properly invested, that the funds are only used for the beneficiary’s benefit, and that the beneficiary’s government benefits are protected. To ensure continuity in trust administration, a successor should be named in the event that the Trustee is unable or unwilling.

Managing Taxes and Fees for the Trust

Managing taxes for a New Jersey special needs trust starts with treating the trust as its own taxpayer. When yearly income climbs above a few hundred dollars, the trustee files IRS Form 1041 plus a state fiduciary return. Many trusts qualify as a Qualified Disability Trust, giving a Qualified Disability Trust a $5,100 exemption for 2025 while the beneficiary gets SSI or SSDI. Distributions still move income out of the trust’s steep brackets and into your personal rate, so timing matters. The 65-day rule in section 663(b) lets the trustee make early-year payments and treat them as last year’s, cutting tax.

Fees sit beside taxes. Under N.J.S.A. 3B:18-24 and 3B:18-25, trustees may take 6% of annual trust income, plus $5.00 per $1,000 of corpus on the first $400,000 and $3.00 per $1,000 above $400,000. Corporate trustees may add investment or custodial charges. Every withdrawal must be logged, and the beneficiary or court may ask for an accounting.

An experienced NJ special needs trust attorney keeps all these moving parts in order. Your lawyer can review the trust language, confirm Qualified Disability status, calendar filing deadlines, and draft the 65-day election. We can calculate commissions, negotiate fee schedules, and petition the court when the statutory scale feels unfair. We can also track charges so Medicaid and SSI officials see the trust as help, not an improper windfall. With the right ongoing guidance, taxes and fees stay predictable. Careful planning today protects eligibility and preserves assets tomorrow, giving your loved one stable support and you freedom to focus on caregiving needs.

Christine Matus, Top-Rated Special Needs Lawyer in New Jersey

At The Matus Law Group, we focus on providing exceptional legal advice in the areas of special needs planning, elder law, real estate law, and estate law. Special needs trusts are powerful estate planning tools for many of our clients and their families. We create these special needs trusts in order to keep assets private and to protect the needs of your loved ones. With proper special needs planning, you can continue to care for your family for as long as they need it.

Supported by a dedicated team of professionals and special needs attorneys, Christine Matus, Esq. and The Matus Law Group offer a suite of services specifically designed for special needs families. Our services are administered by experienced and compassionate attorneys. Our clients are like family and we strive to build relationships with them in order to better understand their needs.

Contact us to schedule a consultation with a member of our team, so that you too can have peace of mind about your estate and the care of your loved ones.