Protecting a child with special needs may lead families to make common mistakes. Here are a few examples:
1. Custodial Accounts. Commonly, there are custodial accounts in the name of a child with special needs. Such an account, however, will affect the child’s availability for government assistance. Custodial accounts are often established long before the child’s special needs are recognized. If the account has an excess of $2,000.00, parents must deplete any such accounts for the care of their child to qualify for Medicaid assistance or allocate the assets to a pooled trust or first party special needs trust. If parents choose to provide assets to or for the benefit of that special needs child, a special needs trust may be established by parents or other family members and gifts can be made directly to this trust account.
2. 529 Plan. There also may be a 529 Plan in the name of a special needs child. This account in the child’s name may affect the child’s ability to receive government assistance. The 529 plan is considered an available asset of the child’s when determining his or her eligibility following the death of the individual who established the plan for such child. The best solution would be to change the designated beneficiary under the 529 Plan to name another child, if that is an option.
3. Retirement Plan and Insurance Policy Beneficiaries. Often times, parents may have worked to develop a special needs trust to which their estate plan is tied, however they forget one critical issue. Life insurance policies and retirement plan accounts pay to designated beneficiaries and do not pass under an individual’s Will. It is vital that parents tie these assets with the special needs trust. If a life insurance policy or retirement plan account are paid directly to a special needs child, the receipt of the assets will affect the child’s ability to receive government assistance.
4. Extended Family conference. Although talking with extended family members eager to benefit a special needs child may be awkward and difficult, the discussion is important. Well intentioned grandparents may allocate a portion of their estate to the special needs grandchild to make sure there are monies available to benefit their special needs grandchild and while intentions are good, the receipt of these monies could affect the grandchild’s ability to receive government benefits. Alternatively, a grandparent’s Will could leave assets to his or her children and if a child predeceases him or her, to the deceased Child’s issue (which could include a special needs grandchild). A bequest by grandparents to a special needs grandchild should be made to a special needs trust. If the parents of a special needs child feel there are family members who might make gifts or bequests to his or her special needs child, the parents should discuss with family members this issue to make sure that they understand that to the extent that they do want to leave assets to a special needs child, the assets should be left to the special needs trust created for the benefit of that child.
5. Use a Specialist. It is important that parents use an attorney who specializes in special needs planning instead of a general practitioner since there are specific issues which must be incorporated in a special needs plan.
Monday, July 26, 2010
Sunday, July 18, 2010
NEW JERSEY SECURITY DEPOSITS LIMITS
The most a landlord can collect as a security deposit is one and one-half times the monthly rent. A landlord may request an increase in your security deposit if the rent is raised. This is limited to 10% of the current deposit amount.
EXAMPLE: If the monthly rent is: $1,000, the landlord may ask for a $1,500 security deposit.
Ask for a receipt when you pay the security deposit. The receipt should include the date, the landlord's signature, and the amount of the security deposit paid. The receipt should show that this money is for a security deposit. Make sure the lease states that you have paid a security deposit and includes the amount of the deposit. KEEP ALL YOUR PAPERWORK. It should be dated and signed.
SECURITY DEPOSIT NOTICE
Under the Rent Security Deposit Act the landlord has to put your security deposit in a separate bank account that pays interest. The landlord must tell you in writing the name and address of the bank where the deposit is being kept, the amount of the deposit, the type of account, and the current interest rate for that account. NOTE: The Landlord may put this directly in the lease.
The security deposit law says that this notice has to be given to the tenant in writing within 30 days after the tenant gives the deposit to the landlord. The law says that the landlord must also give the notice not just within 30 days of getting it from the tenant, but each year at the time the landlord pays the interest to the tenant.
A new landlord must also give the notice within 30 days of buying the property. The notice must be given to the tenant within 30 days after the landlord has moved the deposit from one bank to another, or from one bank account to another (unless the change in the bank or account takes place less than two months before the annual interest payment)
Your security deposit as rent : The law also says that if the landlord does not put the security money in a proper bank account, or does not give a proper written notice to the tenant every time the law provides for, then the tenant can give a written notice to the landlord telling the landlord to use the whole deposit interest per year to pay the tenant's rent.
All notices should be sent to the landlord by certified mail, return receipt requested, and you should keep a copy.
The money can be used to pay future rent or any back rent the tenant owes. Once a tenant legally tells the landlord to use the security deposit as rent, the landlord can't ask the tenant for another deposit as long as the tenant lives in the apartment or house.
Note: There are two exceptions to the rights described in the paragraph above.
• If a landlord does not obey the law that says he or she must pay the interest on the security deposit every year (or if the landlord does not use the interest to pay part of the tenant’s rent), or
• If the landlord does not give a notice about the deposit to the tenant every year, then
the tenant can use the deposit to pay past or future rent due.
But before the tenant can do this, the tenant must give or send the landlord a letter giving the landlord 30 days to pay the interest or give the annual notice.
There are two other important points about the notice of security deposit:
• Landlords will often put the name and address of the bank where your security is deposited, along with the other information required by law, right in the lease. This is sufficient notice under the law.
• Even if the landlord sends you the notice within 30 days, the landlord still violates the law if the notice is not true. If you receive the notice, call the bank to find out if the money has been deposited. If the money was not deposited, you can tell the landlord in writing to use the security deposit to pay your rent just the same as if the landlord had not sent you a notice at all.
Interest on your New Jersey Security deposit
The Rent Security Deposit Act requires landlords who rent 10 or more apartments to place tenants' security deposits in either an insured money market fund or a federally insured bank account. The account must pay a rate of interest set at least quarterly and equal to the average rate of interest paid by the bank on money market accounts.
EXAMPLE: If the monthly rent is: $1,000, the landlord may ask for a $1,500 security deposit.
Ask for a receipt when you pay the security deposit. The receipt should include the date, the landlord's signature, and the amount of the security deposit paid. The receipt should show that this money is for a security deposit. Make sure the lease states that you have paid a security deposit and includes the amount of the deposit. KEEP ALL YOUR PAPERWORK. It should be dated and signed.
SECURITY DEPOSIT NOTICE
Under the Rent Security Deposit Act the landlord has to put your security deposit in a separate bank account that pays interest. The landlord must tell you in writing the name and address of the bank where the deposit is being kept, the amount of the deposit, the type of account, and the current interest rate for that account. NOTE: The Landlord may put this directly in the lease.
The security deposit law says that this notice has to be given to the tenant in writing within 30 days after the tenant gives the deposit to the landlord. The law says that the landlord must also give the notice not just within 30 days of getting it from the tenant, but each year at the time the landlord pays the interest to the tenant.
A new landlord must also give the notice within 30 days of buying the property. The notice must be given to the tenant within 30 days after the landlord has moved the deposit from one bank to another, or from one bank account to another (unless the change in the bank or account takes place less than two months before the annual interest payment)
Your security deposit as rent : The law also says that if the landlord does not put the security money in a proper bank account, or does not give a proper written notice to the tenant every time the law provides for, then the tenant can give a written notice to the landlord telling the landlord to use the whole deposit interest per year to pay the tenant's rent.
All notices should be sent to the landlord by certified mail, return receipt requested, and you should keep a copy.
The money can be used to pay future rent or any back rent the tenant owes. Once a tenant legally tells the landlord to use the security deposit as rent, the landlord can't ask the tenant for another deposit as long as the tenant lives in the apartment or house.
Note: There are two exceptions to the rights described in the paragraph above.
• If a landlord does not obey the law that says he or she must pay the interest on the security deposit every year (or if the landlord does not use the interest to pay part of the tenant’s rent), or
• If the landlord does not give a notice about the deposit to the tenant every year, then
the tenant can use the deposit to pay past or future rent due.
But before the tenant can do this, the tenant must give or send the landlord a letter giving the landlord 30 days to pay the interest or give the annual notice.
There are two other important points about the notice of security deposit:
• Landlords will often put the name and address of the bank where your security is deposited, along with the other information required by law, right in the lease. This is sufficient notice under the law.
• Even if the landlord sends you the notice within 30 days, the landlord still violates the law if the notice is not true. If you receive the notice, call the bank to find out if the money has been deposited. If the money was not deposited, you can tell the landlord in writing to use the security deposit to pay your rent just the same as if the landlord had not sent you a notice at all.
Interest on your New Jersey Security deposit
The Rent Security Deposit Act requires landlords who rent 10 or more apartments to place tenants' security deposits in either an insured money market fund or a federally insured bank account. The account must pay a rate of interest set at least quarterly and equal to the average rate of interest paid by the bank on money market accounts.
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