Creating a special needs trust is a critical step in planning for the future of a loved one with disabilities. We specialize in helping families in New Jersey establish special needs trusts, ensuring that individuals with disabilities can enjoy a secure financial future without jeopardizing their eligibility for essential government benefits.

Understanding Special Needs Trusts

Special needs trusts are designed to hold assets for the benefit of an individual with disabilities, providing for their additional needs while preserving their eligibility for public assistance programs like Medicaid and Supplemental Security Income (SSI). These trusts allow for the enhancement of the beneficiary’s quality of life without disqualifying them from receiving government benefits.

Benefits of Establishing a Special Needs Trust

Establishing a special needs trust offers critical advantages for beneficiaries with disabilities, ensuring their financial security and well-being without compromising their access to vital government assistance.

Preservation of Government Benefits

Assets held in a special needs trust are not counted towards the beneficiary’s asset limits for government assistance programs. This allows individuals with disabilities to receive the financial support they need from the trust while maintaining eligibility for programs like Medicaid and Supplemental Security Income (SSI).

Management of Resources

A trustee is designated to manage the trust assets and make distributions for the benefit of the person with disabilities. This arrangement ensures that funds are used in a manner that best supports the beneficiary’s needs and preferences, providing for their care and enhancing their quality of life.

Flexibility In Use of Funds

Special needs trusts offer considerable flexibility in how funds can be used. Trust distributions can cover a wide range of expenses beyond the basics provided by government benefits, including educational opportunities, recreational activities, and personal care items. This flexibility allows for a more enriched and fulfilling life for the beneficiary.

Types of Special Needs Trusts

Special needs trusts can be structured in various ways to suit the unique needs and circumstances of the beneficiary and their family. Understanding the different types of trusts is essential for making informed decisions about estate planning.

First-Party Special Needs Trusts

First-party special needs trusts are funded with the beneficiary’s assets. These assets may come from an inheritance, a legal settlement, or personal savings. This type of trust is particularly useful for individuals who acquire assets that would otherwise disqualify them from receiving government benefits.

Third-Party Special Needs Trusts

Third-party special needs trusts are established by someone other than the beneficiary, such as parents or other family members. These trusts are funded with assets belonging to these individuals, not the beneficiary, and are designed to provide financial support without affecting benefit eligibility.

Pooled Trusts

Pooled trusts are managed by nonprofit organizations and allow multiple beneficiaries to combine their resources for investment and management purposes. Each beneficiary maintains a separate account for their use, benefiting from the pooled resources’ collective investment and management efficiencies.

Start Planning Today

If you’re considering establishing a special needs trust for a loved one, Galarza & Etwaroo is here to help. Contact us to schedule a consultation.

Our dedicated team will provide the information, support, and legal expertise you need to make informed decisions and ensure the well-being of your family members with disabilities.