Last week the Supreme Court of New Jersey issued an interesting decision in a case that I argued before the Supreme Court on behalf of the National Academy of Elder Law Attorneys. The case is captioned Saccone v. Board of Trustees.
The Saccone case involves the New Jersey Police and Fireman’s Retirement System, commonly known by its acronym, PFRS. The plaintiff, Thomas Saccone, is a retired Newark firefighter. Mr. Saccone has a disabled son, Anthony Saccone.
As a retired firefighter, Mr. Saccone receives a pension through the PFRS. Pursuant to the statutes governing his PFRS pension, if Mr. Saccone were to die, his disabled son would receive a percentage of the pension to which Mr. Saccone were entitled.
The PFRS does not permit Mr. Saccone to change the individual who is entitled to a percentage of his pension if he were to die. In other words, under the law, the pension must be paid to his disabled son and could not be paid to anyone else.
The problem this presented is that Anthony receives government entitlement benefits, such as Supplemental Security Income and Medicaid. These types of benefits are means-tested, meaning that Anthony must have very limited income in order to receive the benefit. The receipt of pension income from PFRS could result in Anthony receiving too much income and being disqualified from the government entitlement benefits to which he otherwise would receive.
From a practical standpoint, this means that if his father were to die, the pension that Anthony would receive could actually be a detriment to him, not a benefit. He might gain some money from the pension but would lose benefits such as Medicaid, a government health insurance benefit. If Anthony were then to need medical care, he would not have health insurance and could end up financially devastated.
To avoid this outcome, Mr. Saccone wanted to name a special needs trust as the recipient of Anthony’s benefit. In this way, if Mr. Saccone were to die, the benefit to which Anthony would be entitled would be paid to the special needs trust. Anthony could then have the benefit of the money in the trust to supplement his needs and would continue to receive government benefits, such as Medicaid.
Mr. Saccone phrased his request to the Police and Fireman’s Board as one to change the beneficiary of Anthony’s benefit to a trust that Mr. Saccone created. The trust Mr. Saccone proposed contained beneficiaries who would receive the money in the trust after Anthony’s death.
The Board rejected Mr. Saccone’s request, holding that the beneficiary of Anthony’s pension benefit could not be changed. Only Anthony could receive the PFRS benefit. Mr. Saccone appealed the Board’s decision, but the Superior Court of New Jersey, Appellate Division, upheld the decision of the Board.
Before the Supreme Court, several non-party entities requested permission to file briefs. When cases are argued before a high court, such as the Supreme Court of New Jersey, it is common for non-parties to request permission to file what are known as amicus briefs. An Amicus is a “friend of the court.” Their role is to bring to the court’s attention important issues that the parties may have overlooked in their arguments to the lower courts.
I filed the amicus brief for the National Academy of Elder Law Attorneys, and I participated in oral argument before the Supreme Court several months ago. It was very exciting to argue a case before the Supreme Court.
Last week, I learned that the Supreme Court accepted the argument that the amici in the Saccone case had proposed. All of the amicus who filed briefs argued that Anthony should be permitted to place his pension benefit into a special needs trust that would contain a payback provision. In this way, after Anthony died, any money remaining in the trust would be paid back to the State, not the third-parties.
The Supreme Court accepted this argument.