SPECIAL NEEDS TRUST AGREEMENT

(New Jersey – Supplemental Needs Compliance)

[// GUIDANCE: This template is designed for use by licensed attorneys only. It contemplates either a First-Party (42 U.S.C. § 1396p(d)(4)(A)) or Third-Party Supplemental Needs Trust. Select the appropriate bracketed options and delete inapplicable provisions before execution.]

TABLE OF CONTENTS

1. Document Header
2. Definitions
3. Operative Provisions
4. Representations & Warranties
5. Covenants & Restrictions
6. Default & Remedies
7. Risk Allocation
8. Dispute Resolution
9. General Provisions
10. Execution Block

1. DOCUMENT HEADER

1.1 Title

Special Needs Trust Agreement (the “Agreement”)

1.2 Parties

a. Grantor/Settlor: [FULL LEGAL NAME], residing at [ADDRESS] (“Grantor”).
b. Primary Beneficiary: [FULL LEGAL NAME], SSN -*-[LAST 4] (“Beneficiary”).
c. Initial Trustee: [FULL LEGAL NAME OR CORPORATE FIDUCIARY] (“Trustee”).
d. Trust Protector** (optional): [NAME] (“Protector”).

1.3 Recitals

A. Grantor wishes to establish an irrevocable trust to provide for the Beneficiary’s supplemental needs while preserving eligibility for means-tested government benefits, including but not limited to Supplemental Security Income (“SSI”) and Medicaid.
B. Trustee is willing to accept the appointment and hold the Trust Estate for the uses and purposes set forth herein.
C. The parties intend this Agreement to be governed by and construed in accordance with the laws of the State of New Jersey (including N.J. Rev. Stat. Title 3B, Chapters 11 & 31) and, where applicable, 42 U.S.C. § 1396p(d)(4).

1.4 Effective Date

This Agreement is made effective as of [MONTH DAY, YEAR] (the “Effective Date”).

2. DEFINITIONS

[// GUIDANCE: Definitions appear in alphabetical order. Cross-check each defined term before finalizing.]

“Act” means 42 U.S.C. § 1396p(d)(4) and the regulations promulgated thereunder.
“Agreement” means this Special Needs Trust Agreement, as amended from time to time.
“Beneficiary” has the meaning set forth in Section 1.2.
“Government Benefits” means all present or future means-tested public assistance programs, including SSI and Medicaid.
“Grantor” has the meaning set forth in Section 1.2.
“Payback Amount” means the amount, if any, required to be reimbursed to the State of New Jersey or any other state for medical assistance correctly paid on behalf of the Beneficiary, pursuant to the Act.
“Protector” has the meaning set forth in Section 1.2.
“Qualified Expenses” means expenses that supplement, but do not supplant, Government Benefits, including (without limitation) medical, dental, educational, recreational, therapeutic, and transportation expenditures.
“State” means the State of New Jersey.
“Supplemental Needs” means the Beneficiary’s special needs that are not provided by Government Benefits.
“Trust” means the trust created by this Agreement.
“Trust Estate” means all property transferred to the Trust and all accumulations thereon.
“Trustee” has the meaning set forth in Section 1.2.

3. OPERATIVE PROVISIONS

3.1 Establishment and Funding

a. Irrevocable Trust. The Trust is irrevocable. Except as expressly provided herein, the Grantor shall have no power to alter, amend, revoke, or terminate this Trust.
b. Initial Corpus. Grantor hereby transfers and delivers to Trustee the property described on Schedule A.
c. Additional Contributions. Subject to Section 3.1(d), additional assets may be added by the Grantor or any third party at any time.
d. [SELECT ONE]
• First-Party Trust. Assets constituting the Beneficiary’s own property may be added, provided the Beneficiary is under age 65 at the time of transfer and the Payback Amount provisions of Section 3.8 apply.
• Third-Party Trust. No assets owned by the Beneficiary shall be added; only third-party contributions are permitted.

3.2 Purpose

The Trust is intended to provide for the Beneficiary’s Supplemental Needs. Distributions shall be made solely in the Trustee’s discretion and only to the extent they do not disqualify or reduce the Beneficiary’s Government Benefits.

3.3 Discretionary Distributions

a. Standard. Trustee may distribute from income and principal as the Trustee, in sole and absolute discretion, deems advisable for the Beneficiary’s Supplemental Needs.
b. Prohibition on Support Obligation. No distribution shall be made that can be construed as fulfilling a legal support obligation of any person.
c. Consideration of Government Benefits. Before making any distribution, Trustee shall consider the effect on the Beneficiary’s eligibility for Government Benefits and may seek written confirmation from the relevant agency.

3.4 No Beneficiary Control

The Beneficiary shall have no power or right to demand distributions, compel accountings (except as required by law), assign interests, or pledge Trust assets.

3.5 Spendthrift Protection

Pursuant to N.J. Rev. Stat. § 3B:11-37, the interest of the Beneficiary is not subject to the claims of creditors and may not be voluntarily or involuntarily transferred.

3.6 Trustee Powers

Subject to fiduciary duties and N.J. Rev. Stat. § 3B:31-68 et seq., the Trustee shall have all powers customarily exercised by trustees, including but not limited to:
1. Investment and reinvestment;
2. Employing professionals and paying reasonable fees;
3. Compromising claims;
4. Managing real or personal property;
5. Establishing ABLE accounts on behalf of the Beneficiary;
6. Petitioning the State probate court for instructions.

3.7 Accounting & Records

a. Annual Accounting. Trustee shall provide an annual accounting to the Protector (if any) and, upon request, to the Beneficiary or the Beneficiary’s legal representative.
b. Court Review. Trustee may seek judicial approval of any accounting in the [COUNTY] Chancery Division, Probate Part.

3.8 Payback Provision (First-Party Trust Only)

[INCLUDE ONLY IF FIRST-PARTY TRUST]
Upon the Beneficiary’s death, after payment of proper administration expenses, Trustee shall pay to the State(s) an amount equal to the total medical assistance paid on behalf of the Beneficiary under the State Medicaid plan(s), to the extent required by the Act. Any balance shall be distributed pursuant to Section 3.9.

3.9 Termination & Remainder

a. Termination Event. The Trust shall terminate upon the earliest of: (i) the Beneficiary’s death; (ii) depletion of the Trust Estate; or (iii) a final court order terminating the Trust.
b. Distribution on Termination. After satisfaction of Section 3.8 (if applicable), remaining assets shall be distributed to:
1. Primary Remainder Beneficiary: [NAME];
2. Contingent Remainder Beneficiaries: [LIST];
3. If none, to the Grantor’s heirs at law.

4. REPRESENTATIONS & WARRANTIES

4.1 Grantor

a. Grantor has full legal capacity and authority to establish this Trust and transfer the property described on Schedule A.
b. Assets transferred are not subject to liens or encumbrances other than as disclosed.
c. The Trust’s purpose is not to defraud creditors.

4.2 Trustee

a. Trustee is duly qualified to serve and has obtained all necessary consents.
b. Trustee will administer the Trust in accordance with New Jersey law and this Agreement.
c. Trustee’s representations survive acceptance of additional assets.

5. COVENANTS & RESTRICTIONS

5.1 Compliance with Law

Trustee shall at all times administer the Trust in compliance with applicable federal and state statutes, regulations, and administrative guidance governing Special Needs Trusts.

5.2 Notice of Benefit Changes

Beneficiary (or legal representative) shall promptly notify Trustee of any change in Government Benefits status.

5.3 Amendment to Preserve Benefits

The Protector, or if none, the Trustee with court approval, may amend this Agreement solely to comply with changes in law affecting Special Needs Trusts, provided the amendment does not (i) grant the Beneficiary control over distributions or (ii) change the distributive scheme contrary to Section 3.9.

6. DEFAULT & REMEDIES

6.1 Events of Default

a. Trustee’s willful misconduct, gross negligence, or material breach of fiduciary duty;
b. Trustee’s insolvency, removal, resignation without qualified successor;
c. Failure to provide required accounting within 60 days of written request.

6.2 Notice & Cure

Protector or any interested party shall give written notice specifying the default. Trustee shall have 30 days (or such longer period as agreed) to cure.

6.3 Remedies

a. Suspension or removal of Trustee by the Protector or court;
b. Injunctive relief to prevent dissipation of Trust assets;
c. Appointment of a receiver or successor trustee;
d. Recovery of damages from the Trustee, limited in accordance with Section 7.2.

6.4 Attorneys’ Fees

In any action to enforce this Agreement, the prevailing party may recover reasonable attorneys’ fees and costs, payable from the Trust Estate except as otherwise ordered by the court.

7. RISK ALLOCATION

7.1 Indemnification

To the fullest extent permitted by law, the Trust Estate shall indemnify the Trustee and its agents against all claims arising out of the proper administration of the Trust, except for willful misconduct or gross negligence.

7.2 Limitation of Liability

Liability of the Trustee (and any successor) shall be limited to the value of the Trust Estate and shall not extend to the Trustee’s separate assets, except to the extent of willful misconduct or gross negligence.

7.3 Insurance

Trustee may purchase fiduciary liability insurance payable from the Trust Estate.

7.4 Force Majeure

Trustee shall not be liable for failure to perform caused by events beyond reasonable control, including acts of God, changes in law, or governmental actions, provided Trustee acts diligently to mitigate.

8. DISPUTE RESOLUTION

8.1 Governing Law

This Agreement shall be governed by the laws of the State of New Jersey, without regard to conflict-of-laws principles.

8.2 Exclusive Forum

All proceedings relating to the Trust shall be brought exclusively in the Chancery Division, Probate Part, of the Superior Court of New Jersey, [COUNTY], or any successor court.

8.3 Limited Arbitration

With the written consent of the Protector (or, if none, all interested parties), disputes regarding annual accountings or discrete administrative matters only may be submitted to binding arbitration under the New Jersey Uniform Arbitration Act, N.J. Rev. Stat. § 2A:23B-1 et seq. The arbitrator shall have no authority to modify trust dispositive provisions.

8.4 Jury Waiver

Because probate courts sit without juries, the parties acknowledge that no jury right attaches to proceedings under this Agreement.

8.5 Injunctive Relief

Nothing in this Section limits any party’s right to seek provisional or injunctive relief in the probate court to protect Trust assets.

9. GENERAL PROVISIONS

9.1 Amendment & Waiver

Except as provided in Section 5.3, this Agreement may be amended only by (i) a written instrument signed by the Grantor (if living), the Trustee, and the Protector, and (ii) court approval if required. No waiver of any provision shall be deemed continuing unless in writing.

9.2 Assignment

Interests in the Trust may not be assigned or encumbered by the Beneficiary. Trustee may not delegate fiduciary responsibilities except to a corporate co-trustee or professional advisor as permitted by law.

9.3 Successors & Assigns

This Agreement binds and benefits the parties and their respective heirs, successors, and permitted assigns.

9.4 Severability

If any provision is held unenforceable, the remaining provisions shall be given full effect, and the court is authorized to reform the unenforceable provision to nearest lawful intent.

9.5 Integration

This Agreement constitutes the entire understanding among the parties with respect to the Trust and supersedes all prior agreements, oral or written.

9.6 Counterparts & Electronic Signatures

The Agreement may be executed in counterparts, each of which shall be deemed an original. Signatures transmitted electronically or via DocuSign (or similar platform) shall be binding.

10. EXECUTION BLOCK

IN WITNESS WHEREOF, the parties have executed this Special Needs Trust Agreement as of the Effective Date.

State of New Jersey Acknowledgment

[Insert statutory jurat and notarial block per N.J. Rev. Stat. § 46:14-2.1]

Witnesses

Schedule A – Initial Trust Corpus

[List cash amounts, securities, real property, or other assets transferred on the Effective Date]

[// GUIDANCE: Attach broker statements, deeds, or assignment instruments as exhibits.]

END OF DOCUMENT