In recent years, the use of the Special Needs Trust (SNT) has proliferated as a mechanism to hold funds received, for example, by a minor as a result of a personal injury or medical-malpractice claim that leaves the child with long-term disabilities. An SNT, by law and under its terms, is designed to hold assets for a beneficiary (such as a disabled child) while preserving his eligibility for governmental benefits such as Medicaid. As the beneficiary of the SNT may, at some point, seek to qualify for governmental benefits such as Medicaid, proceedings involving such trusts typically require notice to, or involve participation by, the state entity charged with administering New Jersey’s Medicaid program—the Division of Medical Assistance and Health Services (the DMAHS).

Two 2013 cases remind us of the role an SNT may play in the planning and administration of assets held for the benefit of a minor child. One focused on the prospect of using a SNT as a form of child support in the context of a matrimonial dispute where the couple had a disabled child. J.B. v. W.B., 215 N.J. 305 (2013). While the court in J.B. declined to approve creation of an SNT because of the inadequate record presented by the movant, it did endorse potential use of an SNT in certain circumstances and described the manner in which such a trust might be approved. The second and perhaps more significant case focused on the circumstances in which the trustee of a SNT could obtain court “instructions” regarding possible complex distribution plans to provide a proper home or care for the disabled beneficiary. In re A.N., 430 N.J. Super. 235 (App. Div. 2013).

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