A recent New Jersey Supreme Court decision about NJ police and firefighters and special needs trusts affects how survivor benefits are passed on. The Court ruled (4-2) in favor of allowing police and firefighters’ benefits to be placed in special needs trusts for their children with disabilities.
The decision comes after years of legal battles by a retired Newark firefighter, who fought to have his mentally disabled son’s share of his survivor benefits placed in a special needs trust in order to protect his son’s federal benefits.
Under current law, federal benefits such as Supplemental Security Income (SSI) and Medicaid are denied to individuals who have assets greater than the low threshold established by the government. The benefits can be preserved if any assets left to disabled children are placed in a trust, which acts as a repository for funds to assist in the care and maintenance of the child, without the financial drawbacks of leaving the funds to the child outright.
Until now, that option was not available to children of police or firefighters. The way the law has been interpreted by the courts previously put the disabled children receiving benefits from the Police and Firemen’s Retirement System (PFRS) at a disadvantage, and put the children at risk of losing their federal benefits when their parent passed away.
Previous rulings by the lower courts had found that the language in the statute establishing the PFRS only allowed for survivor benefits to go to surviving spouses and their children, and indicated that having those funds go into a trust (a legal instrument that allows for property or assets to be held by one person for another person’s benefit) violated the letter of the law.
That assumption has been overturned by the recent ruling. Justice Jaynee LaVecchia, writing for the Court’s majority, stated that, “Public policy…favors a public employee’s ability to provide adequately for the well-being of his disabled child after his death.”
We here at the Law Offices of Lynda Hinkle stand beside the New Jersey chapter of the National Association of Elder Law Attorneys, the Guardianship Society of New Jersey, and the Special Needs Alliance in applauding the Court’s decision. It is about time that those who protect, defend, and serve the public had the same rights in regard to their disabled children as the rest of us have.
If you have concerns about protecting your loved ones after you are gone, or have any questions about your own estate planning, call us at 856-227-7888, or e-mail [email protected] to schedule a free consultation.
The above is not specific legal advice nor does it create a lawyer-client relationship. Do not rely upon it without consulting an attorney to see how the information presented fits your unique circumstances.