Sometimes as elder and disability attorneys we are criticized for helping our clients qualify for, or in some cases maintain, government needs based benefits. “Why should people be able to protect any of their assets and still qualify for government benefits”, they ask. “That’s not who the benefits are intended for.”
The New Jersey Supreme Court, however, in a recent decision recognized the value of what we do to help our clients. The case is Saccone v. Board of Trustees of the Police and Firemen’s Retirement System. Thomas Saccone, a recently retired firefighter has a severely disabled adult son, Anthony, who lives with him. Anthony has been deemed totally disabled by the Social Security Administration and for many years has been receiving SSI and Medicaid benefits, which are a lifeline for him. Both these programs are needs based, meaning that in order to qualify an applicant must meet strict income and asset guidelines.
After Tom retired, he began receiving retirement benefits from the Police and Firemen’s Retirement System (PFRS). He also, with the assistance of his elder law attorney, executed a will that contained a special needs trust (SNT) for Anthony’s benefit.
He ran into a problem, however, when he tried to name the SNT as the beneficiary of his retirement plan to the extent of the survivor benefits that Anthony would receive upon Tom’s death. Tom wanted to make sure that Anthony would not lose his eligibility for SSI and Medicaid as a result of any benefits he is entitled to from Tom’s pension plan. The PFRS refused to honor Tom’s request, stating that they could only pay benefits directly to Anthony or to someone “in care of” Anthony.
Tom appealed the PFRS decision. Over the course of 3+ years the case worked its way through several levels of appeal. Finally, the New Jersey high court ruled in favor of Saccone, a clear success for the family. But, what New Jersey’s high court said about this type of planning is just as important.
The Supreme Court noted that the State Pension Board’s decision denying Saccone’s request was “arbitrary, capricious and unreasonable”. “The Court viewed the Board’s decision requiring a disabled child to have to choose between abandoning survivor benefits from his father or foregoing public benefits to be “harsh and unwarranted” and found the Boards’ interpretation “disserves the very people it was intended to help”.
The judges went on to recognize special needs trusts as “legitimate planning tools” which allow the disabled to meet their care needs. The Court really “got it”, recognizing that the income Anthony would receive from his dad’s pension alone won’t cover the cost of his medical services. That’s why the SNT – and the planning that we do as elder and disability attorneys – is so critical to our clients.
For more information on this case visit the blog of Donald Vanarelli, the attorney who successfully represented Mr. Saccone, at http://www.dvanarelli.com/saccone-supreme-court/.