Special Needs Trust - New Jersey

New Jersey Third-Party Special Needs Trust

Trust name: [TRUST NAME]

Settlor: [SETTLOR FULL LEGAL NAME], of [ADDRESS].

Protected beneficiary: [BENEFICIARY FULL LEGAL NAME], born [DATE] (the “Beneficiary”).

Initial trustee: [TRUSTEE FULL LEGAL NAME], of [ADDRESS].

Execution date: [DATE]

The Beneficiary is a protected person under N.J.S.A. 3B:31-37(a)(1) because [STATE THE APPLICABLE STATUTORY BASIS AND SUPPORTING FACTS]. The Settlor and Trustee intend to create the written, third-party-funded special needs trust described below.

1. Creation and separate funding

The Settlor now irrevocably transfers and delivers to the Trustee the property identified in Schedule A. The Trustee signs below to accept the office and acknowledges receipt. The Trustee shall hold the delivered property, proceeds, and any later accepted third-party gifts as a separate trust estate for the Beneficiary under these terms. A separate deed, assignment, or registration shall also be completed when needed to transfer a particular asset.

Only assets belonging to a person other than the Beneficiary or the Beneficiary's spouse may be contributed. The Trustee shall refuse a proposed contribution of the Beneficiary's or spouse's assets and refer it for separate benefits advice. The Settlor retains no right to revoke this trust or receive distributions from it. Neither the Beneficiary nor the Beneficiary's spouse is the Settlor of this instrument.

2. Purpose and discretionary distributions

The Settlor intends to supplement rather than replace or impair government assistance for the Beneficiary. During the trust term, the Trustee may distribute income or principal only for the Beneficiary's benefit, when and in the amounts the Trustee decides in good faith will further this purpose. The Trustee has broad discretion whether and when to distribute. The Trustee has no obligation to pay the Beneficiary's debts or fund the Beneficiary's support. The Beneficiary cannot compel a distribution at a particular time or for a particular purpose, assign an interest, or encumber an interest.

Before a proposed payment, the Trustee shall consider the Beneficiary's current assistance rules and the payment's likely effect. The Trustee may buy goods or services, pay a provider, or reimburse documented expenses. The Trustee may also make a payment that reduces a benefit if, after considering the cost and value, the Trustee finds it serves the Beneficiary's overall interests. This instrument promises no particular SSI or Medicaid eligibility result.

The Trustee shall retain income not distributed and may accumulate and invest it for the Beneficiary. No other person may receive a beneficial distribution during the Beneficiary's lifetime, apart from an incidental benefit inseparable from an authorized payment for the Beneficiary.

3. Term and complete remainder

This trust ends at the Beneficiary's death. After paying proper trust administration expenses and liabilities, the Trustee shall distribute 100% of the remaining property:

1. To [PRIMARY REMAINDER BENEFICIARY FULL NAME], if living;
2. Otherwise to [ALTERNATE REMAINDER BENEFICIARY FULL NAME], if living;
3. Otherwise to the estate of [ALTERNATE REMAINDER BENEFICIARY FULL NAME].

The beneficiaries of this third-party trust do not direct a Medicaid reimbursement from its remainder. N.J.S.A. 3B:31-37(c) distinguishes a first-party, self-settled OBRA '93 trust; this instrument does not admit the Beneficiary's assets. If a court ends the trust earlier under applicable law, the Trustee shall distribute the balance under this same order, subject to that court's order.

4. Trustees and records

If the Initial Trustee dies, declines or resigns, becomes unable to serve, or is removed, [FIRST SUCCESSOR TRUSTEE FULL NAME] shall serve. If unavailable, [SECOND SUCCESSOR TRUSTEE FULL NAME] shall serve. If no designated successor accepts, the vacancy shall be filled under N.J.S.A. 3B:31-49(c). An outgoing Trustee shall promptly deliver trust property and records to the successor.

The Trustee may invest and reinvest, retain or sell property, open trust accounts, hire needed professional help, pay proper expenses, and take other steps authorized by these terms and New Jersey law, subject to fiduciary duties. The Trustee shall keep trust property separate and identifiable.

The Trustee shall keep the qualified beneficiaries reasonably informed and respond to reasonable requests for administration information. On request by a beneficiary, the Trustee shall provide a copy of this instrument as N.J.S.A. 3B:31-67 requires. In addition, the Trustee shall provide an annual written report of receipts, disbursements, assets, liabilities, and compensation to the Beneficiary or the Beneficiary's legal representative and to any other qualified beneficiary. The Trustee may seek court instructions or approval when appropriate.

5. Protection of interests and trustee responsibility

The Beneficiary's interest is restrained from both voluntary and involuntary transfer before distribution. The special needs trust protection and the Trustee's duty of good-faith discretion are governed by N.J.S.A. 3B:31-37. No creditor of a protected person may attach that person's interest or require the Trustee to distribute to pay that person's claim under that section. This clause does not excuse Trustee misconduct or alter rights that arise after a completed distribution.

A Trustee who breaches trust remains liable as provided in N.J.S.A. 3B:31-72. This instrument does not cap liability at trust assets or excuse bad faith or reckless indifference contrary to N.J.S.A. 3B:31-77. A court may provide relief authorized by law. New Jersey law governs this trust.

6. Signatures

The Settlor signs this written trust and delivers the Schedule A property on the date shown. The Trustee accepts the appointment and acknowledges receipt of that property. The parties may sign before the witnesses below and have their signatures acknowledged where an asset transfer requires it.

Settlor: __________________________ [SETTLOR NAME] Date: __________

Trustee: __________________________ [TRUSTEE NAME] Date: __________

Witness 1: ________________________ Date: __________

Witness 2: ________________________ Date: __________

Schedule A — property transferred on signing

Property and identifying details: [EXACT CASH AMOUNT AND DELIVERY METHOD, OR COMPLETE ASSET DESCRIPTION]

Estimated value: [AMOUNT] Delivery date: [DATE]

I, the Trustee, acknowledge present receipt of the property described above.

Trustee: __________________________ Date: __________