Don’t wait until it’s too late to create a Medicaid special needs trust

An interesting case recently came before the New Jersey Appellate Court that illustrates just how important it is for parents of children with special needs to establish a special needs trust while they are able.  The case involved a single mother who had two daughters with special needs.  Although this mother had mentioned on numerous occasions that she intended to establish a special needs trust for her daughters, she never got around to doing so before she passed away.  A probate judge applied the doctrine of probable intent to establish a special needs trust for the daughters from their mother’s estate, but this ruling was eventually overturned at the appellate level.

The appellate judge determined that the doctrine of probable intent can only be applied to modify an existing will.  Because the mother in this case did not have a will, the doctrine could not be applied to establish a special needs trust.  As such, the mother’s estate transferred outright to the two daughters, which had serious repercussions.  Some assets were used to pay for one daughter’s care, and the other daughter was disqualified from her public benefits.  Had this mother spoken with a special needs trust attorney like she intended to, there is a good chance that her daughters would have received a better planned inheritance that could have kept them eligible for the assistance they needed.

 

 

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