Jan 4, 2012

Star Ledger Biz Brain Question

Shirley B. Whitenack answered a reader’s question in the New Jersey Star-Ledger’s Biz Brain column on January 4, 2012
Question: My 39-year-old son has a spotty health and employment history. He is likely to have minimal savings upon his retirement. How can I fund a hopefully tax-deferred retirement fund for him now without his knowledge?
If your son received public benefits such as Supplemental Security Income (SSI) or Medicaid because of a physical or mental disability, or if he may become eligible for such benefits in the future, you could consider a special-needs trust to preserve your son's eligibility, said Shirley Whitenack, an estate planning attorney with Schenck Price, Smith & King in Florham Park.

"The creation of a special needs trust can accomplish the dual goal of preserving the disabled child's eligibility for such programs and providing a vehicle to hold additional funds from that person or funds contributed by a parent or other third party to supplement those government benefits," she said.

The trust can be established and funded with the assets of the disabled child's parents or other third party, either by will at death or by living trust during the parent's lifetime.

Whitenack said the parent or other third party can continue to contribute to the trust, which can be done without your son's knowledge.

The article can be viewed in its entirety at nj.com