Under a special needs trust in New Jersey (SNT), a person with a disability can receive money, property, and funds while meeting the eligibility criteria for government benefit programs. In a disability trust, three parties are directly involved: the trustor, trustee, and beneficiary. The trustor sets up the trust for the beneficiary (the person with a disability) and the trustee manages it. A special needs trust attorney in NJ can help you create and customize the disability trust to benefit the disabled individual.
What is a Disability Trustee in New Jersey?
In New Jersey, the trustor of the disability trust fund cannot control or cancel the trust. Instead, they must assign a trustee to supervise and manage all fund distributions and investments. A special needs trust attorney will create the trust, customize it, and ensure that the trustee has the powers needed to administer the trust fund. The trust funds are then used for the sole benefit of the disabled beneficiary. In many cases trustees are family members, however, in some cases, the trustees are paid a flat fee, hourly fee, or a percentage of the trust’s assets for their services. In these cases, the trustee is often a professional, such as a lawyer or an accountant.
How to Pick A Disability Trustee?
Choosing the right trustee for a disability trust is critical. The trustee must be willing and have the necessary expertise to manage the trust. That includes paying bills, making sound investments, and preparing tax returns.
A disability trustee can be a relative, an outsider, or both. The idea of a professional trustee is beneficial, but it often makes people uncomfortable. In which case, the best combination is to appoint both a professional and a family member. In this case, the professional serves as a trustee alongside a family member like a parent or sibling.
To sum it up, a trustee must be financially savvy, ethical, well-organized, and most of all understand and care for the disabled individual.
What is The Role of a Disability Trustee in NJ?
Unlike regular trusts, the responsibilities of a disability trustee may be more complex. The critical part of a trustee’s job is to ensure the trust funds are utilized solely for the benefit of the beneficiary. Their main responsibilities include managing the assets as per the instructions in the trust document and tax filing. Accountings are due (at least) annually, at the time of eligibility determination, or redetermination to the eligibility.
The trustee of a disability fund can pay for almost anything as long as:
- The purchase is not illegal
- Does not go against the public policy
- Do not violate the terms of the trust
If the expenses go above $5,000 or deplete the trust’s principal, the trustee is required to send an advance notice to the Department of Human Services in New Jersey (DMAHS). If the DMAHS finds the expenditure inconsistent with the trust expenses, and/or not beneficial for the trust beneficiary, it will notify the trustee and the eligibility determination agency in writing. An estate planning lawyer can help the trustee manage the process.
Get in Touch with a Top-Notch New Jersey Special Needs Trust Attorney
When it comes to your loved ones with special needs, you don’t want to leave anything to the chance. However, it’s not always easy for people without legal experience to navigate through the ups and downs to set up or manage a special needs trust. An attorney can be helpful in both setup and administration of an SNT. Working with a top-notch estate planning lawyer like Christine Matus from Matus Law Group can help you ensure that the trust is created and handled well. With great trust, you can be sure that even after your passing, your loved one will be properly taken care of.