Donnelly Ritigstein Law Offices
Call for a Free Consultation
Toll Free 866-907-6368 Local 856-324-6147

A special needs trust can help loved one who is disabled

A common concern for New Jersey parents is what will happen to their children after they have passed on. This issue is magnified if there is an adult child with a disability or health issue. Estate planning can address these matters and make sure that the adult child is cared for. It is important to know what steps to take to ensure that this is the case.

A special needs trust is beneficial in this vein. Trusts craft a relationship between the person who is funding the trust, the beneficiary and the trustee. With a special needs trust, there will be extra funding for someone who is in a situation where the funds will be necessary for adequate care. People who are disabled might not be able to handle their own finances, live alone, and manage themselves. This is where a special needs trust comes in. It is also useful if governmental assistance like Supplemental Security Income (SSI) is not sufficient to pay for all that they require. It can help with medical care if Medicaid does not cover everything that the disabled person needs. If the trust is crafted skillfully, the beneficiary will still be able to receive help from these programs.

There are two basic special needs trusts that are frequently used. There is a first party trust in which the trust will have the assets and they are the property of the beneficiary. When the beneficiary dies, the funds that remain in the trust will be subject to the payback clause meaning that they will revert to the government for federal benefits the person has received during his or her life. A third party trust will take the assets from the trust and send them to the trustee and not the beneficiary. This third party trust is useful because the funds that are left over after the beneficiary dies will go to contingency beneficiaries like siblings.

The idea of an estate plan is to avoid worry and fear. This is specifically important when caring for someone who is disabled. Having legal assistance with a trust can protect these loved ones and have a comprehensive and organized plan for the future.

Source: forbes.com, "Ways To Provide For Your Disabled Adult Child's Future," Janet Reynolds, July 12, 2017

No Comments

Leave a comment
Comment Information

Moorestown Office
212 West Route 38
Suite 200
Moorestown, NJ 08057

Map & Directions

Haddonfield Office
132 Kings Highway E
Suite 105
Haddonfield, NJ 08033

Map & Directions

Linwood Office
327 Central Avenue
Linwood, NJ 08221

Map & Directions

Cape May Court House Office
618 Route 9 South
Cape May Court House, NJ 08210

Map & Directions

Gloucester, Cumberland and Salem County Offices
57 Euclid St.
Woodbury, NJ 08096

Map & Directions

Back To Top