A trust designed to supplement, and not to supplant, impair or diminish, public benefits a beneficiary is receiving, or may in the future be receiving. Designed to (1) protect the trust corpus in the event that the beneficiary is, or becomes, eligible for public benefits and (2) protect the beneficiary’s eligibility for benefits, which might otherwise be in jeopardy by an outright distribution of the trust corpus.
A special needs trust may be established if the following criteria, inter alia, are met:
N.J.S.A. 3B:11-36 et seq.; N.J.A.C. 10:71-4.11 (g)(1)(i-xviii).
A SNT may be established by a parent, grandparent, legal guardian of the individual, or a court.
Consider applying to the Court:
Pursuant to 42 U.S.C. 1396p(d)(4)(a), an individual may remain eligible for such benefits under the “Payback Trust” provision if he or she has:
A trust containing the assets of an individual under age 65 who is disabled…and which is established for the benefit of such individual by a parent, grandparent, legal guardian of the individual, or a court if the State will receive all amounts remaining in the trust upon the death of such individual up to an amount equal to the total medical assistance paid on behalf of the individual under a State plan under this subchapter.
Id. (emphasis supplied). The highlighted language supports the conclusion that there is no payback provision required for a third-party SNT (or a Testamentary SNT).
Distributions from a SNT could affect the beneficiary’s public benefit amount, depending on the form and amount of the distribution.
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