New Jersey Law for Children with Special Needs : New Jersey Special Needs Lawyer & Attorney : Cole Schotz Meisel Forman & Leonard Law Firm : NJ, Mid-Atlantic Special Needs Children Planning & Trusts

There is a movement underway to encourage Congress to change the tax code to provide up to a $5,000 tax credit for legal fees paid with establishing legal guardianship.  The tax credit may also be available for legal fees paid in connection with establishing a trust for a person with disabilities.  The tax credit would be available for the person who actually paid the legal fees.

The Special Needs Tax Credit Alliance, a non-profit organization, has been formed in order to raise awareness for this issue and to build national support for the tax credit.  The Special Needs Tax Credit Alliance petition is located at http://specialneedstaxcredit.com.

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The end of a marriage does not end your commitment to your child with special needs. First, it is important for any child support dedicated to a child with special needs to be allocated under the separation agreement to a special needs trust so that these assets do not affect the child’s ability to receive government assistance. It is important in connection with a divorce that each spouse consider the impact of the separation on his or her individual special needs planning. Each parent must have appropriate special needs planning in order to protect the child’s eligibility for assistance. Each spouse can have their own special needs trust with different trustees and different beneficiaries. Despite this, it is important that where possible, the parents of the child with special needs coordinate the funding of the trusts to ensure that adequate resources will be available to the child, and to ensure that the both spouses have incorporated the planning necessary to preserve the child’s eligibility for assistance.

If you incorporate special needs planning in your estate plan, but your ex-spouse has not, the planning you have done will not be enough to protect your child’s eligibility for assistance at the time that your ex-spouse dies.

In obtaining the divorce, one issue which is not often contemplated is who is responsible for becoming the guardian of the child upon the child’s attainment of age 18 (one parent or both together) and who has responsibility for educational decisions with respect to a child (this could be both parents or one). These issues should be addressed in a divorce agreement to minimize disputes following the divorce.
 

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Gov. Corzine signed new legislation this week, known as “Ronnie’s Law,” that requires fiduciaries (such as executors, testamentary guardians and testamentary trustees) of estates of developmentally disabled individuals to post bonds in Superior Court. The statute is the Legislature's response to the theft of $814,000 by a disbarred Audubon Heights attorney from an estate established for an autistic man, Ronnie Mich, by his father. The bond amount is based on the value of the estate’s assets and the purpose of the bond is to protect the estate’s assets from bad acts by the fiduciaries. The fiduciary will be required to provide the court with an estate accounting every five years.

Certain blood relatives of the disabled individual who are appointed as fiduciaries, such as children, grandchildren, great-grandchildren, parents, grandparents, great-grandparents, brothers/sisters, aunts/uncles and nieces and nephews, as well as certain financial institution and non-profit community trusts, are exempt from having to post the bond. In addition, if the estate is below $25,000, or if the court otherwise orders, no bond is required. This bill takes effect in 60 days.

The definition of “developmental disability” under the statute means a severe, chronic disability of a person which: (1) is attributable to a mental or physical impairment or combination of mental or physical impairments; (2) is manifest before age 22; (3) is likely to continue indefinitely; (4) results in substantial functional limitations in three or more of the following areas of major life activity, that is, self-care, receptive and expressive language, learning, mobility, self-direction and capacity for independent living or economic self-sufficiency; and (5) reflects the need for a combination and sequence of special interdisciplinary or generic care, treatment or other services which are of lifelong or extended duration and are individually planned and coordinated. Developmental disability includes but is not limited to severe disabilities attributable tomental retardation, autism, cerebral palsy, epilepsy, spina bifida and other neurological impairments where the above criteria are met.
 

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While having a properly constructed estate plan from a legal perspective is critical in protecting a child with special needs, it is equally important for the parents of a child with special needs to make every effort for a seamless transition following a parent’s death for the caregivers of a child.

Towards that end, a letter of intent is critical in providing assistance to future caregivers. As a parent, you know all of those special things about your child which likely no one else in the world does. You know what sets your child off and what calms your child down. You know what routines and schedules are important to your child and what items they need in bed with them in order to sleep soundly through the night. You know what therapies have worked with your children, what medications have worked and those that have failed to enhance the quality of your child’s life.

At your death, this critical information is lost unless recorded in some fashion that is easily accessible to the people who assume responsibility for your child going forward. This could mean future guardians, trustees of a trust for your children or simply family members who step into the void left upon your death. A letter of intent contains all of that information.

The letter of intent should be updated annually so that it always contains current information. If you would like a copy of a sample letter of intent, please let us know and we will provide you with one. Please note that this letter of intent should be updated annually as the needs of your child change over time. A copy of the letter of intent can be kept with your attorney or simply in a file clearly marked in your home. It is not a legal document and legal counsel is not required in order to prepare this document.
 

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Once your child turns 18 years of age, she is considered an adult and presumed to be competent. Physicians and other health care providers are bound to protect your child’s privacy under the law and are restricted from discussing your adult child’s medical care with anyone without her consent. A health care provider’s ability to disclose health care information becomes particularly complicated in the case of a patient with special needs that impairs their mental capacity. This complication arises because your child’s lack of mental capacity may prevent her from consenting effectively to the sharing of her health care information. Consequently, a health care provider may refuse to discuss your child’s medical treatment and other issues with you.

Another concern relates to protecting your child’s finances from individuals who seek to take advantage of her because of her special needs. As an adult, your child can enter into contracts and maintain bank and other accounts which can be exploited by persons with bad intentions. This is of particular concern where your child may be the recipient of a large monetary gift or the beneficiary of an estate or life insurance policy. Therefore, parents of a child with special needs who is going to turn 18 should consider applying to the courts of the county in which they live to be appointed as their child’s legal guardians. While guardianship applications can be made at any time and are routinely made for older adults under varying circumstances, making an application before your child becomes an adult insures that your ability to safeguard your child and to make medical and other necessary decisions for her will be seamless.

Guardianship appointments are flexible and can be comprehensive or, depending on your child’s functionality, be tailored to allow your child the greatest freedom possible to make medical, financial and other decisions. The process requires the filing of specified documents with the court that include one or more physician or psychologist certifications and, if applicable, a certification from the appropriate representative of the Division of Developmental Disabilities  ("DDD") for your region. The application process is streamlined and can be concluded within a few months. Parents seeking to protect their children with special needs should consider making an application for guardianship before the need to make significant medical, financial or other important life decisions arise. These applications are regularly incorporated into a family’s estate plan which often involves setting up special needs trusts and taking other measures in conjunction with guardianship applications to secure and protect the futures of your children with special needs.
 

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Just as it is important to go to the doctor, the dentist and the eye doctor and to review the status of your finances on a regular basis, it is as important to reevaluate your estate planning on a regular basis.

Over the course of any period of years, there can be multiple issues which arise – there can be changes to tax laws which affect planning decisions; there can be changes in a family’s financial situation (both increases and decreases in wealth) which affect the decisions that are appropriate; there can be changes in relationships with the people appointed to serve in various capacities (as executors, trustees, guardians); and there can be changes in situations with children which necessitate the need to revisit planning.

Where a child with special needs is involved, the need to revisit planning on a regular basis becomes even more paramount.  First, it is critical to ensure that there is adequate funding for a plan on a long term basis. Since in many situations, these children will not be able to support themselves, this issue take on heightened importance.  Further, changes in the law or in positions taken by state agencies may change what is appropriate for a special needs trust.  Evaluating your plan at least every 1 or 2 years is crucial to ensure that you have the best plan in place for you and your loved ones.

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Estate planning is an important aspect of an overall financial plan for any individual, but it takes on even greater significance for the parents of children with special needs. Parents of children with special needs face a number of unique estate planning decisions that should be carefully considered with professional assistance. These considerations include:

Naming guardians. If parents pass away, who will provide day-to-day care for the special needs child? This is a critical and difficult decision and must be provided for in the parents’ Wills.

Creating a special needs trust.  A special needs trust is a trust that permits (but does not require) distributions to a child with special needs for a variety of reasons. Often, distributions are permitted only to supplement but not supplant monetary support that the individual is receiving from governmental benefit programs such as Social Security Disability Income (“SSDI”), Supplemental Security Income (“SSI”) and Medicaid. Failure to create a proper special needs trust can inadvertently disqualify the special needs child for these programs. The trust structure is also important to ensure that assets are not placed in a child’s hands before the child is responsible enough to invest and use the assets prudently (if ever).

The choice of trustee for a special needs trust is another critical decision. A trustee should have financial savvy, should have the parents’ complete trust, and should be or become knowledgeable regarding the child’s needs.

Powers of attorney.  A power of attorney allows an individual to appoint people to manage his or her assets and make investment decisions on his or her behalf. Having this document avoids the necessity of having to go to court to get someone appointed as a guardian if an individual cannot manage his or her own affairs. A power of attorney is important for all individuals, but in a special needs situation, it is important for both the parents and the special needs child.

Parents of an adult child with special needs should also consider whether a power of attorney is adequate or if parents should be named as guardians of the adult child to better protect the child’s interests. If there is a concern that the child cannot adequately manage his or her own affairs at all or could be taken advantage of, a guardianship (full or limited) may be more appropriate.

Life insurance. Life insurance is typically used to ensure that sufficient assets are available to provide adequate income to the surviving spouse and to provide for the care of children until they finish schooling and are able to earn a living. In a special needs situation, life insurance can be used to fund a special needs trust to ensure there will be assets available for the rest of the child’s lifetime. This may be especially important if parents can no longer provide the care the child needs.

While estate planning is essential for any individual, for a parent with a special needs child it takes on additional significance.
 

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As your child with special needs approaches the age of 18, it is very important to consider whether applying for guardianship is appropriate. If the child is not able to handle his or her own medical or financial decisions as a result of his or her special needs issues, you as a parent should apply to become legal guardian of the child. Once a child obtains the age of 18, a parent has no legal right to make decisions on behalf of his or her child.

In order to retain control of decisions related to the child, parents must be named guardian of the person and property of the child. In New Jersey, limited guardianships are also an option. This permits guardians to be named to assist a child where needed without taking full control away from the child. For example, a limited guardianship could permit a child to obtain a drivers license, to retain control over a bank account with some set dollar amount or to make or participate in medical decisions.

Alternatively, a full guardianship gives complete control and total decision-making power over the child and his or her finances to a parent or other named individual. In New Jersey, judges will not build in successor guardians when naming guardians, so often families will name multiple individuals as guardians from the inception (such as both parents, or both parents and an adult sibling together).

A guardianship action begins with the filing of a complaint with the Court requesting that a guardian be named. Two affidavits must be submitted with the Complaint. These must either come from two doctors or psychologists, or if the child with special needs is registered with the Division of Developmental Disabilities (“DDD”), an affidavit from DDD can replace one of the two above referenced affidavits. The affidavits must be signed, and the child must have been seen by the doctor or doctors within thirty days of the filing.

A court appointed attorney will be named to represent the child with special needs and advocate on his or her behalf. That attorney will review the medical records of the child with special needs, will meet with the child with special needs and the proposed guardian or guardians, and will prepare a report of his or her opinion regarding the motion for guardianship. Some judges require the motion for a guardian to be named to be heard in Court, with the proposed guardian present, and others will respond on the papers with respect to the motion.

It is important for you to anticipate that the guardianship process from start to finish will take approximately three to six months, so this should be started before the child turns age 18. A guardian will not be named until the child reaches 18, however, so the action cannot be commenced too early either.

Unfortunately, many parents do not think to get this process moving until there are extenuating circumstances (such as the need for urgent medical care or hospitalization). While the courts will appoint a temporary guardian on an expedited basis where an emergency exists, even these can take several weeks to complete.
 

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