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Special Needs Trust

Introducing the Special Needs Trust ("SNT")

Governmental benefits do not sufficiently provide for every beneficiary’s lifestyle and care needs. Our special needs attorneys help families develop a plan of care through the use of special needs trusts. A Special Needs Trust ("SNT") can protect gifts, inheritance, lawsuit settlements, or other personal assets that would financially disqualify an individual from Medicaid. An SNT must meet complex government benefits laws. Our Special Needs Team includes attorneys with years of experience who will prepare your ("SNT") in accordance with government benefits rules and guide the trust to manage the funds correctly.

First-Party Special Needs Trust

A First-Party Special Needs Trust, also known as a "payback trust" or a "(d)(4)(a) trust" is a Special Needs Trust established with the assets of the individual with disabilities. The individual must be under 65 at time of the establishment and funding a First-Party Special Needs Trust. The Medicaid agency is entitled to reimbursement from any assets remaining in a First-Party Special Needs Trust upon death of the individual beneficiary or trust termination for other reasons. At the death of the individual, there is reimbursement “dollar for dollar” to the Medicaid agency up to amount paid by Medicaid on behalf of the individual who established the First Party Special Needs Trust.

Third-Party Special Needs Trust

A Third-Party Special Needs Trust, also known as a "supplemental benefits trust" or "supplemental needs trust", is a special needs trust established with assets that never belonged to the beneficiary/individual with disabilities. A Third-Party Special Needs Trust can be established at any time and there is no requirement to reimburse the state agency upon the beneficiary’s death.

Pooled Special Needs Trust

A Pooled Special Needs Trust is managed by a non-profit. Assets remaining in the account upon the death of the individual with disabilities may be subject to payback or retention by the non-profit organization.

Characteristics of a Successful Trustee

  • Knowledge of the beneficiary and understanding of his or her needs
  • Understanding of the government benefits programs for which the beneficiary participates
  • Personal knowledge or access to effective counsel to advise on impact of trust distributions on continued eligibility for benefits
  • Thick skin and patience

What is a Special Need?

There is no true definition of “special need” or “supplemental benefit” but it is NOT:

  • Basic necessities of life (food, shelter, utilities)
  • Incidental spending money (unearned income)
  • Gifts
  • Insurance on life of disabled beneficiary

Ask a Special Needs Attorney

Many families have limited experience working with attorneys. Learn more about Who We Are and What We Do.

Wealth Preservation Services

Porzio’s Wealth Preservation attorneys serve New Jersey families with offices in Morristown NJ, Princeton NJ, and New York City. We provide legal counsel on Estate Planning, Elder Law, Asset Protection Planning, Special Needs Planning, Wills and Trusts, Powers of Attorney, Health Care Powers, Living Wills, Probate, Estate Administration, Estate and Trust Litigation, Guardianship, and Tax Planning to families in Bergen County, Essex County, Hudson County, Hunterdon County, Mercer County, Middlesex County, Monmouth County, Passaic County, Somerset County, Sussex County, Union County and Warren County.