N.J. Stat. tit. 3B, ch. 11

in effect

N.J. Stat. § 3B:11-1 Creator's reserved interest in trust alienable subject to creditors' claims.

3B:11-1. Creator's reserved interest in trust alienable subject to creditors' claims. a. The right of any creator of a trust to receive either the income or the principal of the trust or any part of either thereof, presently or in the future, shall be freely alienable and shall be subject to the claims of his creditors, notwithstanding any provision to the contrary in the terms of the trust. b. A trustee's discretionary authority to pay trust income or principal to the creator of such trust in an amount equal to the income taxes on any portion of the trust principal chargeable to the creator shall not be considered to be a right of the trust creator to receive trust income or principal within the meaning of subsection a. of this section. The trust creator shall not be considered to have the right to receive income or principal of the trust solely because the trustee is authorized under the trust instrument or any other provision of law to pay or reimburse the creator for any tax on trust income or trust principal that is payable by the creator under the law imposing such tax or to pay any such tax directly to the taxing authorities. No creditor of a trust creator shall be entitled to reach any trust property based on the discretionary powers described in this subsection. amended 2013, c.55.

N.J. Stat. § 3B:11-2 Letters of trusteeship under a will

A testamentary trustee or substituted testamentary trustee, before exercising the authority vested in him by virtue of any will admitted to probate by the Superior Court, or any surrogate's court of this State, shall obtain letters of trusteeship from that court. L.1981, c. 405, s. 3B:11-2, eff. May 1, 1982.

N.J. Stat. § 3B:11-3 Trustees construed to be joint tenants

All estates heretofore or hereafter granted or devised to trustees shall be construed to have vested and to vest an estate of joint tenancy in the trustees. When a trustee is removed a conveyance or devise from the removed trustee to the old and new trustees or to the new trustees shall vest in the old and new trustees or the new trustees an estate in joint tenancy, notwithstanding any want of unity. When a trustee dies or resigns or his office becomes vacant for any cause, and a new trustee is appointed, the surviving trustees, if any there be, and the new trustees shall hold the trust estate as joint tenants, and a conveyance of a right and interest in the trust estate from the surviving trustees, to the new trustee shall vest in all the trustees an estate in joint tenancy, notwithstanding any want of unity. When a new, additional or substituted trustee is appointed by a court of competent jurisdiction or becomes such by operation of the terms of a will or other instrument or by operation of law, title to the trust assets shall forthwith vest in all the trustees in office including the new, additional or substituted trustee as joint tenants. L.1981, c. 405, s. 3B:11-3, eff. May 1, 1982.

N.J. Stat. § 3B:11-4 Effect to be given consent by holders of general powers of appointment upon beneficiaries

For the purpose of granting consent or approval with regard to the acts or accounts of a fiduciary or trustee, including relief from liability or penalty for failure to post bond, or to perform other duties, and for purposes of consenting to modification or termination of a trust or to deviation from its terms, the sole holder or all coholders of a presently exercisable general power of appointment, including one in the form of a power of amendment or revocation, are deemed to act for beneficiaries to the extent that the interests of the beneficiaries as objects, takers in default, or otherwise are subject to the power. As used in this section, a presently exercisable general power of appointment is one which enables the power holder to presently draw absolute ownership to himself. L.1981, c. 405, s. 3B:11-4, eff. May 1, 1982.

N.J. Stat. § 3B:11-4.1 Limitations on powers of trustees; applicability; "interested party" defined

1. a. The following powers conferred by a governing instrument upon a trustee in his or her capacity as a trustee shall not be exercised by that trustee: (1) The power to make discretionary distributions of either principal or income to or for the benefit of the trustee, the trustee's estate, or the creditors of either, unless either: (a) limited by an ascertainable standard relating to the trustee's health, education, support or maintenance, within the meaning of 26 U.S.C. 2041 and 2514; or (b) exercisable by the trustee only in conjunction with another person having a substantial interest in the property subject to the power which is adverse to the interest of the trustee within the meaning of 26 U.S.C. 2041(b) (1) (C) (ii); If a trustee is prohibited by paragraph (1) of this subsection from exercising a power conferred upon the trustee, the trustee nevertheless may exercise that power but shall be limited to distributions for the trustee's health, education, support or maintenance to the extent otherwise permitted by the terms of the trust. (2) The power to make discretionary distributions of either principal or income to satisfy any of the trustee's personal legal obligations for support or other purposes; (3) The power to make discretionary allocations in the trustee's personal favor of receipts or expenses as between income and principal, unless such trustee has no power to enlarge or shift any beneficial interest except as an incidental consequence of the discharge of such trustee's fiduciary duties; (4) The power to exercise any of the powers proscribed in this subsection with regard to an individual other than the trustee to the extent that such individual could exercise a similar prohibited power in connection with a trust that benefits the trustee. b. Unless otherwise prohibited by the provisions of subsection a. of this section, a trustee may exercise a power described in that subsection in favor of someone other than the trustee, the trustee's estate, or the creditors of either. c. If a governing instrument contains a power proscribed under subsection a. of this section the following shall apply: (1) If the power is conferred on two or more trustees, it may be exercised by the trustee or trustees who are not so prohibited as if they were the only trustee or trustees; or (2) If there is no trustee in office who can exercise such power upon application of any interested party, a court of competent jurisdiction shall appoint a trustee to exercise such power or, except as provided in subsection d. of this section, a successor trustee who would not be disqualified shall be appointed to exercise the power that the other trustees cannot exercise in accordance with the provisions of the trust instrument as if the office of trustee were vacant. d. No beneficiary of a trust, in an individual, trustee or other capacity, may appoint, or remove and appoint, a trustee who is related or subordinate to the beneficiary within the meaning of 26 U.S.C. 672 (c) unless: (1) the trustee's discretionary power to make distributions to or for such beneficiary is limited by an ascertainable standard relating to the beneficiary's health, education, support or maintenance as set forth in subsection a. of this section; (2) the trustee's discretionary power may not be exercised to satisfy any of such beneficiary's legal obligations for support or other purposes; and (3) the trustee's discretionary power may not be exercised to grant to such beneficiary a general power to appoint property of the trust to the beneficiary, the beneficiary's estate or the creditors thereof within the meaning of 26 U.S.C. 2041. This subsection d. shall not apply if the appointment of the trustee by the beneficiary may be made only in conjunction with another person having a substantial interest in the property of the trust, subject to the power, which is adverse to the exercise of the power in favor of the beneficiary within the meaning of 26 U.S.C. 2041(b) (1) (C) (ii). e. The provisions of this section shall not apply during the time that a trust remains revocable or amendable by the grantor. f. This section applies to: (1) Any trust created under a governing instrument executed 90 days or more after the effective date of this act, unless the governing instrument expressly provides that this act does not apply; and (2) Any trust created under a governing instrument executed before 90 days after the effective date of this act, unless all interested parties affirmatively elect on or before three years after the effective date by a written declaration signed by or on behalf of each interested party and delivered to the trustee, not to be subject to the application of this act. In the case of a testamentary trust, such declarations shall be filed with the clerk of the court in which the will was admitted to probate. g. In this section the term "interested party" means: (1) Each trustee then serving; and (2) Each person having an interest in income or principal whom it would be necessary to join as a party in a proceeding for the judicial settlement of a trustee's account or, if such a person has not attained majority or is otherwise incapacitated, the person's legal representative under applicable law or the person's agent under a durable power of attorney that is sufficient to grant such authority. L.1996,c.41.

N.J. Stat. § 3B:11-8 Short title

This article shall be known and may be cited as the "Charitable Trust Law of 1971." L.1981, c. 405, s. 3B:11-8, eff. May 1, 1982.

N.J. Stat. § 3B:11-9 Definitions

As used in this article: a. "Code" means the Internal Revenue Code of 1954 as amended; b. "Private foundation trust" means a charitable trust which is a private foundation described in section 509(a) of the code, including each nonexempt charitable trust described in section 4947(a)(1) of the code which is treated as a private foundation; c. "Split-interest trust" means a nonexempt split-interest trust described in section 4947(a)(2) of the code, but only to the extent that section 508(e) of the code is applicable to the nonexempt split-interest trust under section 4947(a)(2) of the code; d. "Trust instrument" means a will, deed, agreement, court order, or other instrument pursuant to which money or other property is entrusted to a fiduciary, and also means the certificate of incorporation of a nonprofit corporation administering a charitable foundation trust; e. "Trustee" means every fiduciary administering a trust instrument, and includes a corporation which is a private charitable foundation administering a private foundation trust; f. "Trust" means private foundation trusts and split-interest trusts. L.1981, c. 405, s. 3B:11-9, eff. May 1, 1982.

N.J. Stat. § 3B:11-10 Provision included in trust instruments governing nonprofit corporations administering private foundation trusts

Notwithstanding any provision to the contrary contained in any law of this State or in any trust instrument, and except as otherwise provided in N.J.S. 3B:11-12, each trust instrument governing a nonprofit corporation administering a private foundation trust shall, by virtue of this article, and without any further act by any person or persons, be deemed to include the following: "This corporation shall make distributions at times and in a manner as not to subject it to tax under section 4942 of the Internal Revenue Code of 1954 as amended, and shall not engage in any act of self-dealing as defined in section 4941 of the code, and shall not retain any excess business holdings as defined in section 4943 of the code, and shall not make any investments as defined in section 4944 of the code, and shall not make any taxable expenditure which would subject it to tax under section 4945 of the code." L.1981, c. 405, s. 3B:11-10, eff. May 1, 1982.

N.J. Stat. § 3B:11-11 Provision included in trust instruments governing split-interest trusts or private foundation trusts

Notwithstanding any provision to the contrary contained in any law of this State or in any trust instrument, and except as otherwise provided in N.J.S. 3B:11-12, each trust instrument governing a split-interest trust or a private foundation trust other than one as described in N.J.S. 3B:11-10, shall, by virtue of this article and without any further act by any person or persons, be deemed to include the following: "Distributions of this trust shall be made at times and in a manner as not to subject the trust to tax under section 4942 of the Internal Revenue Code of 1954, as amended, and shall not engage in any act of self-dealing as defined in section 4941 of the code, and shall not retain any excess business holdings as defined in section 4943 of the code, and shall not make any investment as defined in section 4944 of the code, and shall not make any taxable expenditure which would subject it to tax under section 4945 of the code." L.1981, c. 405, s. 3B:11-11, eff. May 1, 1982.

N.J. Stat. § 3B:11-12 Execution of instrument stating certain provisions not applicable to trust; filing

The trustee or trustees of any trust may, without judicial proceedings, execute an instrument stating that the provisions of N.J.S. 3B:11-10 or N.J.S. 3B:11-11, as the case may be, shall not be applicable to the trust, and upon filing a copy thereof in the office of the Secretary of State of this State, the provisions of N.J.S. 3B:11-10 or N.J.S. 3B:11-11, as the case may be, shall not apply to the trust. L.1981, c. 405, s. 3B:11-12, eff. May 1, 1982.

N.J. Stat. § 3B:11-13 Construction of article

This article shall be so construed as to enable split-interest trusts and private foundation trusts to qualify for the maximum tax exemptions available to those trusts under the Internal Revenue Code of 1954 as amended. L.1981, c. 405, s. 3B:11-13, eff. May 1, 1982.

N.J. Stat. § 3B:11-14 Power of courts or Attorney General not impaired by article

Nothing in this article shall impair the power conferred by law upon the courts or the Attorney General of this State with respect to any trust subject to the provisions of this article. L.1981, c. 405, s. 3B:11-14, eff. May 1, 1982.

N.J. Stat. § 3B:11-15 Application of article

This article shall apply to all trusts, as defined herein, whether created before or after December 13, 1971. L.1981, c. 405, s. 3B:11-15, eff. May 1, 1982.

N.J. Stat. § 3B:11-16 Pooled trust accounts

1. Prepaid funeral expense moneys used to fund a prepaid funeral agreement may be deposited into a pooled trust account in a federally insured State or federally chartered bank, savings bank or savings and loan association pursuant to a written trust agreement the beneficiaries of which shall be the purchasers or intended funeral recipients. Any such trust agreement shall assure that the following terms and conditions are clearly and conspicuously disclosed in writing to purchasers and intended funeral recipients prior to the acceptance of any moneys by the trustees: a. The right to immediately withdraw on demand any moneys plus accrued interest paid into the trust, except as provided in section 1 of P.L.1991, c.502 (C.2A:102-16.1). b. The right to receive periodic statements not less than once per year reflecting the amount of principal and accrued interest, if any, in the trust. c. The amount or rate of commissions to be taken. d. The identity and location of the trustees. e. The location of the trust agreement and the conditions under which it may be examined. All such trust agreements entered into by a provider on or after the effective date of this 1993 amendatory and supplementary act shall comply with the provisions set forth in sections 1 through 13 of P.L.1993, c.147 (C.45:7-82 to 45:7-94). L.1985,c.147,s.1; amended 1991,c.502,s.2; 1993,c.147,s.20.

N.J. Stat. § 3B:11-16.1 Definitions used in C.3B:11-16 et al.

22. As used in P.L.1985, c.147 (C.3B:11-16 et al.): "Assigned funeral insurance policy" means any insurance policy or annuity contract that is not a newly issued funeral insurance policy, but that, at the time an assignment was made of some or all of its proceeds, was intended to provide funds to the provider, whether directly or indirectly, at the time of the insured's death in connection with a prepaid funeral agreement. "Deliver" or "delivery" means the conveyance of actual control and possession of prepaid funeral goods that have been permanently relinquished by a provider, or other person, firm or corporation, or an agent thereof, to the purchaser or person paying the moneys, or personal representative of the intended funeral recipient. Delivery has not been made if the provider, or other person, firm or corporation, or an agent thereof: (1) Arranges or induces the purchaser or person paying the moneys to arrange for the storage or warehousing of prepaid funeral goods ordered pursuant to a prepaid funeral agreement, with or without evidence that legal title has passed; or (2) Acquires or reacquires actual or constructive possession or control of prepaid funeral goods after their initial delivery to the purchaser or person paying the moneys or personal representative of the intended funeral recipient. This definition of delivery shall apply to this term as used in P.L.1985, c.147 (C.3B:11-16 et al.), notwithstanding the provisions set forth in the Uniform Commercial Code, Title 12A of the New Jersey Statutes. "Funeral insurance policy" means any newly issued funeral insurance policy or assigned funeral insurance policy. "Funeral trust" means a commingled or non-commingled account held in a pooled trust or P.O.D. account, established in accordance with P.L.1957, c.182 (C.2A:102-13 et seq.) or P.L.1985, c.147 (C.3B:11-16 et al.), which is intended as the depository for cash payments connected with a prepaid funeral agreement. "Intended funeral recipient" means the person named in a prepaid funeral agreement for whose bodily disposition the prepaid funeral agreement is intended to provide. The intended funeral recipient may or may not be the purchaser. "Newly issued funeral insurance policy" means any insurance policy or annuity contract that, at the time of issue, was intended to provide, or was explicitly marketed for the purpose of providing, funds to the provider, whether directly or indirectly, at the time of the insured's death in connection with a prepaid funeral agreement. "Payable on death account" or "P.O.D. account" means an account payable on request to the purchaser or intended funeral recipient of a prepaid funeral agreement, during the lifetime of the intended funeral recipient and on his death, to a provider of funeral goods and services. "Pooled trust" means a pooled trust account established pursuant to P.L.1985, c.147 (C.3B:11-16 et al.). "Preneed funeral arrangements" means funeral arrangements made with an intended funeral recipient or his guardian, agent or next of kin, for the funeral of the intended funeral recipient. "Prepaid funeral agreement" means a written agreement and all documents related thereto made by a purchaser with a provider prior to the death of the intended funeral recipient, with which there is connected a provisional means of paying for preneed funeral arrangements upon the death of the intended funeral recipient by the use of a funeral trust or funeral insurance policy, made payable to a provider and in return for which the provider promises to furnish, make available or provide the prepaid funeral goods or services, or both, specified in the agreement, the delivery of which occurs after the death of the intended funeral recipient. "Prepaid funeral goods" means personal property typically sold or provided in connection with a funeral, or the final disposition of human remains, including, but not limited to, caskets or other primary containers, cremation or transportation containers, outer burial containers, vaults, as defined in N.J.S.8A:1-2, memorials as defined in N.J.S.8A:1-2, funeral clothing or accessories, monuments, cremation urns, and similar funeral or burial items, which goods are purchased in advance of need and which will not be delivered until the death of the intended funeral recipient named in a prepaid funeral agreement. Prepaid funeral goods shall not mean the sale of interment spaces and related personal property offered or sold by a cemetery company as provided for in N.J.S.8A:1-1 et seq. "Prepaid funeral services" means those services typically provided in connection with a funeral, or the final disposition of human remains, including, but not limited to, funeral directing services, embalming services, care of human remains, preparation of human remains for final disposition, transportation of human remains, use of facilities or equipment for viewing human remains, visitation, memorial services or services which are used in connection with a funeral or the disposition of human remains, coordinating or conducting funeral rites or ceremonies and similar funeral or burial services, including limousine services provided in connection therewith, which services are purchased in advance of need and which will not be provided or delivered until the death of the intended funeral recipient named in a prepaid funeral agreement. Prepaid funeral services shall not mean the sale of services incidental to the provision of interment spaces or any related personal services offered or sold by a cemetery company as provided for in N.J.S.8A:1-1 et seq. "Provider" means a person, firm or corporation duly licensed and registered pursuant to the "Mortuary Science Act," P.L.1952, c.340 (C.45:7-32 et seq.) to engage in the business and practice of funeral directing or mortuary science, or an individual serving as an agent thereof and so licensed: (1) Operating a duly registered mortuary in accordance with P.L.1952, c.340 (C.45:7-32 et seq.) and the regulations promulgated thereunder; (2) Having his or its business and practice based within the physical confines of the registered mortuary; and (3) Engaging in the practice of making preneed funeral arrangements, including, but not limited to, offering the opportunity to purchase or enroll in prepaid funeral agreements. "Purchaser" means the person named in a prepaid funeral agreement who purchases the prepaid funeral goods and services to be provided thereunder. The purchaser may or may not be the intended funeral recipient. If the purchaser is different than the intended funeral recipient, it is understood that the relationship of the purchaser to the intended funeral recipient includes a means to provide administrative control over the agreement on behalf of the intended funeral recipient. L.1993,c.147,s.22; amended 1994,c.163,s.4.

N.J. Stat. § 3B:11-17 Trustees' commission

2. The trustees of a pooled trust fund established pursuant to section 1 of this act for the benefit of not less than 200 purchasers or intended funeral recipients shall be entitled to a commission of not more than 1% per annum of the corpus of the trust fund. The trustees of a pooled trust fund for the benefit of less than 200 purchasers or intended funeral recipients shall not be entitled to any commission. All expenses incurred in the administration of such a trust or the services rendered thereby shall be deducted from income received by the trustees and in no event shall the trustees invade the corpus of the trust funds. L.1985,c.147,s.2; amended 1993,c.147,s.21.

N.J. Stat. § 3B:11-18 Report; rules, regulations

The Commissioner of Banking shall determine whether, among pooled trust funds established pursuant to this act, adequate competition exists with respect to interest rate yield and commissions or fees charged during the one year period following the effective date of this act. No later than one year after the effective date of this act the commissioner shall report to the Legislature his findings and any recommendations he may have to provide for greater competition among pooled trust funds. The commissioner shall adopt rules and regulations pursuant to the "Administrative Procedure Act," P.L. 1968, c. 410 (C. 52:14B-1 et seq.) as may be necessary to effectuate the purposes of this section. L. 1985, c. 147, s. 3, eff. April 24, 1985.

N.J. Stat. § 3B:11-19 Short title

This act shall be known and may be cited as the "New Jersey Community Trust for Persons with Severe Chronic Disabilities Act." L. 1985, c. 424, s. 1.

N.J. Stat. § 3B:11-20 Findings

The Legislature finds that it is in the public interest to encourage activities by voluntary associations and private citizens which will supplement and augment those services provided by local, State, and federal government agencies in discharge of their responsibilities toward individuals with severe chronic disabilities. The Legislature further finds that, as a result of changing social, economic, and demographic trends, families of persons with severe chronic disabilities are increasingly aware of the need for a vehicle by which they can assure ongoing individualized personal concern for a severely disabled family member who may survive his parents or other family members, and provide for the efficient management of small legacies or trust funds to be used for the benefit of such a disabled person. In a number of other states voluntary associations have established foundations or trusts intended to be responsive to these concerns. Therefore, a study of the experience in other states suggests that New Jersey would benefit by the enactment of enabling legislation expressly authorizing the formation of community trusts in accordance with criteria set forth by statute and administered by the Secretary of State. These community trusts permit the pooling of resources contributed by families or persons with philanthropic intent, along with the reservation of portions of these funds for the use and benefit of designated beneficiaries. L. 1985, c. 424, s. 2.

N.J. Stat. § 3B:11-21 Purposes, policies.

3. This act shall be liberally construed and applied to promote its underlying purposes and policies, which are among others to: a. encourage the orderly establishment of community trusts for the benefit of persons with severe chronic disabilities; b. ensure that community trusts are administered properly and that the managing boards of the trusts are free from conflicts of interest, except that an unpaid member of the managing board of a nonprofit corporation provider shall not be deemed to be in conflict as a member of the managing board of a trust; c. facilitate sound administration of trust funds for persons with severe chronic disabilities by allowing family members and others to pool resources in order to make professional management investment more efficient; d. provide parents of persons with severe chronic disabilities peace of mind in knowing that a means exists to ensure that the interests of their children who have severe chronic disabilities are properly looked after and managed after the parents die or become incapacitated; e. help make guardians available for persons with severe chronic disabilities who are incapacitated, when no other family member is available for this purpose; f. encourage the availability of private resources to purchase for persons with severe chronic disabilities goods and services that are not available through any governmental or charitable program and to conserve these resources by limiting purchases to those which are not available from other sources; g. encourage the inclusion, as beneficiaries of community trusts, of persons who lack resources and whose families are indigent, in a way that does not diminish the resources available to other beneficiaries whose families have contributed to the trust; and h. remove the disincentives which discourage parents and others from setting aside funds for the future protection of persons with severe chronic disabilities by ensuring that the interests of beneficiaries in community trusts are not considered assets or income which would disqualify them from any governmental or charitable entitlement program with an economic means test. L.1985, c.424, s.3; amended 1993, c.224, s.1; 2013, c.103, s.23.

N.J. Stat. § 3B:11-22 Definitions.

4. As used in P.L.1985, c.424 (C.3B:11-19 et seq.): a. "Beneficiary" means any person with a severe chronic disability who has qualified as a member of the community trust program and who has the right to receive those services and benefits of the community trust program as provided in P.L.1985, c.424. b. "Board" means the board of trustees or the group of persons vested with the management of the business and affairs of a corporation, formed for the purpose of managing a community trust, irrespective of the name by which the group is designated. c. "Community trust" means a nonprofit organization which offers the following services: (1) administration of special trust funds for persons with severe chronic disabilities; (2) follow-along services; (3) guardianship for persons with severe chronic disabilities who are incapacitated, when no other immediate family member or friend is available for this purpose; and (4) advice and counsel to persons who have been appointed as individual guardians of the persons or estates of persons with severe chronic disabilities. d. "Follow-along services" means those services offered by community trusts which are designed to insure that the needs of each beneficiary are being met for as long as may be required and may include periodic visits to the beneficiary and to the places where the beneficiary receives services, participation in the development of individualized plans being made by service providers for the beneficiary, and other similar services consistent with the purposes of P.L.1985, c.424. e. "Severe chronic disability" means a physical or mental impairment which is expected to give rise to a long-term need for specialized health, social, and other services, and which makes the person with that impairment dependent upon others for assistance to secure these services. f. "Trustee" means any member of the board of a corporation, formed for the purpose of managing a community trust, whether that member is designated as a trustee, director, manager, governor, or by any other title. g. "Surplus trust funds" means funds accumulated in the trust from contributions made on behalf of an individual beneficiary, which, after the death of the beneficiary, are determined by the board to be in excess of the actual cost of providing services during the beneficiary's lifetime, including the beneficiary's share of administrative costs, and of any amounts provided to a remainderman. L.1985, c.424, s.4; amended 1993, c.224, s.2; 2013, c.103, s.24.

N.J. Stat. § 3B:11-23 Nonprofit corporations

This act shall apply to every community trust established in this State after the effective date of this act. In addition to meeting the other requirements of the act, every board which administers a community trust shall incorporate as a nonprofit corporation in accordance with the provisions of Title 15A of the New Jersey Statutes. Except as otherwise provided herein, the provisions of Title 15A of the New Jersey Statutes shall apply to the community trust. L. 1985, c. 424, s. 5.

N.J. Stat. § 3B:11-24 Board

6. Every community trust shall be administered by a board. The board shall be comprised of no less than nine and no more than 21 members, at least one-third of whom shall be parents or relatives of persons with severe chronic disabilities. Board members shall be selected, to the maximum extent possible, from geographic areas throughout the area served by the trust. The certificate of incorporation filed with the Secretary of State pursuant to Title 15A of the New Jersey Statutes shall, in addition to the requirements set forth in that Title, demonstrate that the requirements of this section have been met. L.1985,c.424,s.6; amended 1993,c.224,s.3.

N.J. Stat. § 3B:11-25 No compensation

Notwithstanding any other provision of law to the contrary, no trustee may be compensated for services provided as a member of the board of a community trust. No fees or commissions shall be paid to these trustees; however, a trustee may be paid for necessary expenses incurred by the trustee and may receive indemnification as permitted under Title 15A of the New Jersey Statutes. L. 1985, c. 424, s. 7.

N.J. Stat. § 3B:11-26 Bylaws

The board shall adopt bylaws which shall include a declaration delineating the primary geographic area serviced by the trust and the principal services to be provided and shall file the bylaws with the Secretary of State. L. 1985, c. 424, s. 8.

N.J. Stat. § 3B:11-27 Services; guardianship

The board may retain paid staff as it may deem necessary to provide follow- along services to the extent required by each beneficiary. The board may authorize the expenditure of funds for any goods or services which, in its sole discretion, it determines will promote the well-being of any beneficiary, including recreational services. The board may pay for the burial of any beneficiary. The board, however, may not expend funds for any goods or services of comparable quality to those available to any particular beneficiary through any governmental or charitable program, insurance, or other sources. The board may expend funds to meet the reasonable costs of administering the community trust. The board is not required to provide services to a beneficiary who is a competent adult and who has refused to accept the services. Further, the board shall not provide services of a nature or in a manner that would be contrary to the public policy of this State at the time the services are to be provided. In either case, the board may offer alternative services that are consistent with the purposes of this act and in keeping with the best interests of the beneficiary. The board may accept appointment as guardian of the person, guardian of the estate or guardian of both on behalf of any beneficiary. If the board accepts appointment as guardian of the person of an individual, it shall assign a staff member to carry out its responsibilities as the guardian. The board may, on request, offer consultative and professional assistance to an individual, private or public guardian of any of its beneficiaries. L. 1985, c. 424, s. 9.

N.J. Stat. § 3B:11-28 Contributions; written statement of services

The board may accept contributions, bequests, and designations under life insurance policies to the community trust on behalf of individuals with severe chronic disabilities for the purpose of qualifying them as beneficiaries. At the time a contribution, bequest, or assignment of insurance proceeds is made, the trustor shall receive a written statement of the services to be provided to the beneficiary. The statement shall include a starting date for the delivery of services or the condition precedent, such as the death of the trustor, which shall determine the starting date. The statement shall describe the frequency with which services shall be provided and their duration, and the criteria or procedures for modifying the program of services from time to time in the best interests of the beneficiary. L. 1985, c. 424, s. 10.

N.J. Stat. § 3B:11-29 Itemized annual statement

Along with the annual report filed with the Secretary of State pursuant to Title 15A of the New Jersey Statutes, the board shall file an itemized statement which shows the funds collected for the year, income earned, salaries, other expenses incurred, and the opening and final trust balances. A copy of this statement shall be made available, upon request, to any beneficiary, trustor, or designee of the trustor. In addition, once annually, each trustor or the trustor's designee shall receive a detailed individual statement of the services provided to the trustor's beneficiary during the previous 12 months and the services to be provided during the following 12 months. The board shall make a copy of the individual statement available to any beneficiary, upon request. L. 1985, c. 424, s. 11.

N.J. Stat. § 3B:11-30 Qualification of indigent persons

The board may accept gifts and use surplus trust funds for the purpose of qualifying as beneficiaries any indigent person whose family members lack the resources to make a full contribution on that person's behalf. The extent and character of the services and selection of beneficiaries are at the discretion of the board. The board may not use surplus trust funds to make any charitable contribution on behalf of any beneficiary or any group or class of beneficiaries. The board may accept gifts to meet start-up costs, reduce the charges to the trust for the cost of administration, and for any other purpose that is consistent with this act. Gifts made to the trust for an unspecified purpose shall be used by the board either to qualify indigent persons whose families lack the means to qualify them as beneficiaries of the trust or to meet any start-up costs that the trust incurs. L. 1985, c. 424, s. 12.

N.J. Stat. § 3B:11-31 Special requests; individual trusts

The board may agree to fulfill any special requests made on behalf of a beneficiary as long as the requests are consistent with this act and provided an adequate contribution has been made for this purpose on behalf of a beneficiary. The board may agree to serve as trustee for any individual trust created on behalf of a beneficiary, regardless of whether the trust is revocable or irrevocable, has one or more remaindermen or contingent beneficiaries, or any other condition, so long as the individual trust is consistent with the purposes of this act. L. 1985, c. 424, s. 13.

N.J. Stat. § 3B:11-32 Community trust irrevocable

14. A community trust for persons with severe chronic disabilities is irrevocable, but the trustees in their sole discretion may provide compensation for any contribution to the trust to any trustor who, upon good cause, withdraws a beneficiary designated by the trustor from the trust, or if it becomes impossible to fulfill the conditions of the trust with regard to an individual beneficiary for reasons other than the death of the beneficiary. The trustor may also designate one or more remaindermen at the time the contribution is made to the trust. L.1985,c.424,s.14; amended 1993,c.224,s.4.

N.J. Stat. § 3B:11-33 Not deemed asset

Notwithstanding any other provision of law to the contrary, the beneficiary's interest in any community trust shall not be deemed to be an asset for the purpose of determining income eligibility for any publicly operated program, nor shall that interest be reached in satisfaction of a claim for support and maintenance of the beneficiary. No agency shall reduce the benefits or services available to any individual because that person is the beneficiary of a community trust. L. 1985, c. 424, s. 15.

N.J. Stat. § 3B:11-34 Not subject to rule against perpetuities

A community trust shall not be subject to or held to be in violation of any principle of law against perpetuities or restraints on alienation or perpetual accumulations of trusts. L. 1985, c. 424, s. 16.

N.J. Stat. § 3B:11-35 Settlement, dissolution, merger

The board shall settle a community trust by filing a final accounting in the Superior Court. In addition, at any time prior to the settlement of the final account, the board, the Secretary of State, or the Attorney General may bring an action for the dissolution of a nonprofit corporation in the Superior Court for the purpose of terminating the trust or merging it with another charitable trust. No trustee or any private individual shall be entitled to share in the distribution of any of the trust assets upon dissolution, merger, or settlement of the community trust. Upon dissolution, merger, or settlement, the Superior Court shall distribute all of the remaining net assets of the community trust in a manner that is consistent with the purposes of this act. L. 1985, c. 424, s. 17.

N.J. Stat. § 3B:11-36 Findings, declarations regarding special needs trusts

1. The Legislature finds and declares that: a. It is in the public interest to encourage persons to set aside amounts to supplement and augment assistance provided by government entities to persons with severe chronic disabilities; b. By enacting section 13611 of the federal Omnibus Budget Reconciliation Act of 1993, 42 U.S.C. s.1396p(d)(4), the United States Congress affirmed this view by permitting the establishment of a trust to supplement and augment assistance for a person who is disabled without disqualifying that person from benefits under the Medicaid program; c. In some instances, trusts must be established by a court in order to comply with the provisions of 42 U.S.C. s.1396p(d)(4); d. However, the current law in New Jersey does not specifically authorize the establishment of these trusts and subsection f. of section 6 of P.L.1968, c.413 (C.30:4D-6) may be construed as impeding their establishment; and e. Therefore, legislation is appropriate to facilitate the establishment of trusts to supplement and augment assistance provided by government entities to persons with severe chronic disabilities and persons who are disabled under the federal Social Security Act. L.2000,c.96,s.1.

N.J. Stat. § 3B:11-37 Establishing an OBRA '93 trust

3. a. As used in this section "OBRA '93 trust" means a trust established pursuant to 42 U.S.C. s.1396p(d)(4)(A) or an account within a pooled trust pursuant to 42 U.S.C. s.1396p(d)(4)(C). b. Upon the request of an interested party, a court may establish an OBRA '93 trust for a person who is disabled as defined in section 1614(a)(3) of the federal Social Security Act (42 U.S.C. s.1382c (a)(3)), whether or not the person is an incapacitated person as defined in N.J.S.3B:1-2, and may direct that the assets of the person with a disability be placed in the OBRA '93 trust. c. Prior to establishing an OBRA '93 trust for a person with a disability who is incapacitated, the court shall consider the factors listed in N.J.S.3B:12-3. d. Prior to establishing an OBRA '93 trust for a person who is a minor, the court shall consider the applicable Rules of Court and State law relating to the handling of funds for a minor, including, but not limited to, the provisions of N.J.S.3B:15-16 and N.J.S.3B:15-17. e. Nothing in this section shall be construed to preclude an OBRA '93 trust from being created by any person in addition to a court as would be consistent with 42 U.S.C. s.1396p(d)(4). f. Notwithstanding any provision or principle of law to the contrary, a beneficiary, grantor, trustee or other person shall not have authority to revoke an OBRA '93 trust. This provision shall apply whether or not an OBRA '93 trust instrument designates the trust as irrevocable or whether the OBRA '93 trust was created by a court or otherwise. L.2000,c.96,s.3.

Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://www.njleg.state.nj.us/legislative-activity/statutesFetched: 10/17/2026