February 28, 2024

Shirley B. Whitenack and Meredith L. Grocott Win Appeal Regarding Termination of Special Needs Trust

Shirley Berger Whitenack and Meredith L. Grocott, partners and co-chairs of the firm’s Estates and Trusts Litigation Practice Group, recently won a favorable decision from the New Jersey Appellate Division on behalf of their clients, the parents of a child with disabilities who was the beneficiary of a first-party special needs trust. As with any Medicaid qualifying first-party special needs trust, the trust included certain restrictions and reporting requirements. When the family moved back to their native country, Brazil, the parents, through Whitenack and Grocott, filed a successful motion in the trial court to terminate the special needs trust and create a new irrevocable trust for their child who was no longer eligible for Medicaid due to living outside the United States. Whitenack and Grocott maintained that it was unanticipated at the time the special needs trust was created that the family would move back to Brazil and that the court had the authority to create a new trust. Among other things, the individual co-trustee argued that the special needs trust should not be terminated. The Appellate Division agreed that the special needs trust could be terminated and that the lower court had the authority to create an irrevocable trust for the benefit of the child. The new trust is more flexible and appropriate for the child’s current situation in Brazil.