J.B. v. W.B. (069972)

SYLLABUS

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the
convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the
interest of brevity, portions of any opinion may not have been summarized.)

J.B. v. W.B. (A-111-11) (069972)

Argued March 11, 2013 -- Decided August 20, 2013

CUFF, P.J.A.D. (temporarily assigned), writing for a unanimous Court.

In this appeal, the Court considers for the first time the role of a special needs trust for the benefit of an
adult, unemancipated, disabled child and under what circumstances a child support obligation under an existing
negotiated agreement may be modified to allow for the creation of a special needs trust.

Plaintiff J.B. and defendant W.B. were married in 1985 and have two children. A.B., who was born in
1988, is autistic. J.B. and W.B. divorced on October 10, 2002, and entered into a comprehensive post-settlement
agreement (PSA) which addressed child support obligations but deferred issues regarding post-secondary school
education. The parties recognized that A.B. likely would never be emancipated, and J.B. agreed to continue paying
his expenses, including medical, psychological, and special education costs. While establishing life insurance terms,
the parties contemplated creation of a special needs trust to protect the proceeds A.B. eventually would receive.

In 2009, A.B., who was twenty-one, began attending a post-secondary school in Connecticut for persons
with special needs. Later that year, J.B. moved to direct his child support payments for A.B. into a special needs
trust designed to fund A.B.’s educational and living expenses. J.B. asserted that his salary had decreased since
creation of the PSA, the parties should prepare for the possibility of his untimely death, and W.B. should not receive
A.B.’s support payments now that A.B. resides at school. He further asserted that A.B. would be ineligible for
certain government benefits if the support payments were not paid into a special needs trust. The trial court denied
J.B.’s motion, finding that he failed to show changed circumstances warranting relief from the PSA.

J.B. appealed, and the Appellate Division affirmed. The panel noted that the PSA contemplated many of
the hypothetical situations posed in J.B.’s modification request. Moreover, both parties understood that A.B. likely
never would be emancipated and J.B.’s obligations to him would remain throughout his life. J.B. also did not
establish with certainty that a special needs trust would render A.B. eligible for any government benefits. Rather,
the panel saw J.B.’s motion as nothing more than a self-serving effort to revise the PSA in a manner favorable to
him. Finally, because A.B. was not a party and there were no issues involving parenting time or custody, the panel
rejected J.B.’s argument that the trial court should have appointed a guardian ad litem. The Court granted J.B.’s
petition for certification. 210 N.J. 217 (2012).

HELD: A parent seeking to modify a negotiated agreement for the support of a disabled child through the
establishment of a special needs trust must present a specific plan and demonstrate how the proposed trust will
benefit the disabled child. When a disabled child is the subject of a proposed special needs trust, it is within the trial
court’s discretion to appoint a guardian ad litem.

1. Special needs trusts allow disabled individuals to maintain eligibility for needs-based government benefits, a use
that was authorized by Congress under the federal Omnibus Budget Reconciliation Act of 1993 and in New Jersey
by N.J.S.A. 3B:11-37(b). Assets placed in a special needs trust by disabled individuals, or persons acting on their
behalf, are not considered “available assets” for purposes of determining Supplemental Security Income (SSI) and
Medicaid eligibility. Several requirements must be met in order for trust assets to be excluded from the disabled
person’s income, including that the assets will supplement, not supplant, government benefits. In New Jersey, child
support paid to a parent is considered an asset of the child and will disqualify the child from receiving government
benefits. In light of the protections afforded by a special needs trust, it can be an effective tool in planning for the
future of a disabled child, although parents may choose to fund their child’s future directly in order to avoid the
limitations placed on trust funds and eliminate governmental intrusion. (pp. 15-21)
2. Decisions regarding the modification of child support are reviewed for abuse of discretion. PSAs are enforced
according to the parties’ original intent, and should not be modified by a trial court absent fraud, unconscionability,
or overreaching during negotiations of the PSA. However, in the interest of ensuring fairness in the dissolution of
marriages, courts retain the equitable authority to modify privately reached child support agreements. A party to a
comprehensive negotiated PSA who is seeking to modify a support obligation must meet the threshold standard of
changed circumstances. Changed circumstances are not limited to events unknown at the time of the agreement, and
include changes in the needs of the child or the income of a parent. In crafting agreements terminating a marriage,
divorcing parents are encouraged to anticipate the needs of their children beyond the present circumstances,
although even the most thoughtful parents may not anticipate every future event. Therefore, even when a negotiated
plan is in place, proposed modifications that may be more advantageous to the child should not be dismissed out of
hand. The threshold changed circumstances standard assumes that the parties anticipated the event precipitating the
application for modification of the PSA. However, although modification may be unfair if the PSA addresses the
changed circumstance, the standard will not bar consideration of the motion for modification where resolution of an
acknowledged issue was deferred. In such situations, the guiding principle is the best interests of the child.
Redirecting a child support obligation from a parent to a special needs trust should not be considered exceptional or
extraordinary relief if the plan is in the child’s best interests. (pp. 21-27)

3. Here, the original PSA deferred the issue of post-secondary education, as well as the question of establishing a
special needs trust. Because J.B. did not commit to fully fund A.B.’s post-secondary education or all future
financial needs, his application to establish a special needs trust should have been evaluated in accordance with the
best interests of the child standard. However, J.B.’s application presented little more than a concept, preventing the
trial court from reaching an informed decision. Although the record suggests that A.B.’s long-term needs would be
better met if he were eligible for government programs, it sheds little light on the fundamental question of whether
the current support funds are sufficient to meet those needs. A parent seeking to modify a negotiated agreement for
the support of a disabled child must present a specific plan and demonstrate how a proposed trust will benefit the
disabled child. At a minimum, the trial court must have a complete understanding of the disabled child’s current
needs, the cost to support those needs, and any available funding resources. When a proposed plan relies on access
to government benefits, it must address eligibility rules, the timespan for attaining eligibility, the length of time
before benefits are available once the child is eligible, and the means of defraying current costs without
compromising the child’s eligibility. The plan also must designate a trustee and address the terms and conditions for
disbursement of the corpus of the trust. Because J.B.’s proposed plan meets none of these requirements, the
Appellate Division’s affirmance of the order denying his motion was proper. (pp. 27-29)

4. No New Jersey rule or statute addresses the question of whether a guardian ad litem should be appointed for a
dependent, disabled child who is the subject of a proposed special needs trust. The role of a guardian is to assist the
court in determining the best interests of a minor or incompetent individual, and the decision to appoint a guardian is
within the trial court’s discretion. When a proposed modification may fundamentally affect a disabled child’s
future, the court should not hesitate to appoint a guardian, and also should seriously consider doing so when one
parent resists the other’s application to establish a trust. Here, the court did not abuse its discretion by declining to
appoint a guardian since the proposed plan was entirely speculative and lacked the detail required for an informed
decision as to whether it was in A.B.’s best interests. In the event either parent presents a plan that permits an
informed decision, the court should consider appointment of a guardian ad litem. (pp. 29-33)

The judgment of the Appellate Division is AFFIRMED AS MODIFIED.

CHIEF JUSTICE RABNER; JUSTICES LaVECCHIA, ALBIN, HOENS and PATTERSON; and
JUDGE RODRÍGUEZ (temporarily assigned) join in JUDGE CUFF’s opinion.

2
 SUPREME COURT OF NEW JERSEY
A-111 September Term 2011
069972

J.B.,

Plaintiff-Appellant,

v.

W.B.,

Defendant-Respondent.

Argued March 11, 2013 – Decided August 20, 2013

On certification to the Superior Court,
Appellate Division.

Bonnie C. Frost argued the cause for
appellant (Einhorn, Harris, Ascher,
Barbarito & Frost, attorneys; Ms. Frost and
Christopher J. Roman, on the briefs).

Paul A. Rowe argued the cause for respondent
(Greenbaum, Rowe, Smith, and Davis,
attorneys; Mr. Rowe and Lisa B. DiPasqua, on
the briefs).

Mary M. McManus-Smith argued the cause for
amicus curiae Legal Services of New Jersey
(Melville D. Miller, Jr., President,
attorney; Ms. McManus-Smith, Mr. Miller, and
JoAnne T. Mantz, on the brief).

JUDGE CUFF (temporarily assigned) delivered the opinion of

the Court.

Plaintiff and defendant in this matter are divorced parents

of an autistic son who has special needs. Both acknowledged

that he likely would never be emancipated. At the time of their
divorce, the parents negotiated a property settlement agreement

(PSA) that deferred some issues about their son for a later

date. Several years later when their son enrolled in an out-of-

state post-secondary school, the father filed a motion to

establish financial responsibility for their son’s education and

to establish a special needs trust. Concluding that the PSA

addressed the support issues before the trial court and that the

father had not demonstrated changed circumstances to warrant a

modification of his support obligation, the trial court denied

the motion. The trial court also observed that the proposed

trust plan lacked sufficient detail to permit an informed

decision about whether such a trust would be in the best

interests of the child. The Appellate Division agreed and

affirmed.

This case presents our first opportunity to consider the

role of a special needs trust for the benefit of an adult,

unemancipated, disabled child. Although we acknowledge that any

application to modify a support obligation must satisfy the

threshold requirement of changed circumstances if the PSA fully

addressed the issue, maturation of a child and his or her

changing needs may satisfy the changed circumstances standard.

Moreover, when the parties have deferred future financial

arrangements to a later date, the applicant need not demonstrate

changed circumstances to permit consideration of the merits of

2
the application. In all instances, the best interests of the

child is the guiding principle.

In this case, the parties deferred certain issues regarding

future support of their disabled son, and the father submitted

an application to modify the PSA and address the deferred

issues. The application to establish a special needs trust,

however, did not contain sufficient information to permit a

Family Part judge to determine whether a trust funded by the

father and used to supplement certain government benefits better

met the son’s current and future needs than the arrangement

adopted initially in the PSA. Accordingly, we affirm the

judgment of the Appellate Division denying the father’s motion

to modify his support obligation and to create a special needs

trust. We also set forth non-exhaustive guidelines for

consideration by the Family Part of an application to establish

such trusts.

I.

Plaintiff J.B. and defendant W.B. married on October 19,

1985. Two children were born of the marriage: A.B. on March

11, 1988, and M.B. on July 30, 1991. A.B. is autistic.

Plaintiff and defendant divorced on October 10, 2002.

After two years of litigation, the parties entered into a

comprehensive PSA, which addressed most issues relating to the

divorce, including child support obligations, but deferred other

3
issues, such as the parties’ respective financial obligations

for post-secondary school education. The parties agreed to the

following child support terms:

[T]he Plaintiff shall pay to the Defendant
the sum of $4,166.66 per child ($50,000 per
year, per child) as and for child support.
The payments shall be made by the Plaintiff
by way of automatic deposit into the
Defendant’s bank account.

Further, plaintiff agreed that his child support obligations for

M.B. would continue until M.B.’s emancipation.1 In regard to

A.B., however, the parties

recognize[d] that [A.B.] is autistic, has
special needs, and probably will never be
emancipated. Both parties are committed to
a course of action which preserves, promotes
and protects [A.B.’s] best interest. The
Plaintiff has paid and shall continue to pay
for [A.B.’s] unreimbursed and uncovered
medical, dental, hospital, surgical,
psychiatric, psychological, special
education, and other similar expenses which
are reasonable and appropriate for [A.B.]

The parties agreed that both M.B. and A.B. should “attend

and accomplish the highest level of schooling/education possible

for that child.” The parties, however, did not make specific

arrangements in the PSA for the payment of each child’s post-

high school education. The parties agreed that, “[i]f the

1
Pursuant to the PSA, if M.B. took “[p]ermanent residence away
from the residence of both custodial parents, . . . not
includ[ing] residence while away at college,” he would be
considered “emancipated” for purposes of plaintiff’s child
support payments.

4
parties are unable to agree as to the payment of [post-high

school] educational costs and expenses, either will have the

right to apply to the [c]ourt for appropriate relief.”

Plaintiff also agreed to continue A.B.’s medical insurance

and to maintain life insurance policies naming the children as

beneficiaries. Plaintiff agreed to maintain a $1.5 million life

insurance policy, which later increased to $2.5 million. In

establishing life insurance terms, the parties also contemplated

the creation of a special needs trust, agreeing that, “[i]f the

plaintiff elects to establish a life insurance trust to fulfill

his life insurance obligations[,] . . . [t]he parties shall

confer and agree as to the appropriate Trust language which will

insulate the proceeds for the protection of the parties’ son,

[A.B.], such as by creating a ‘Special Needs trust.’”

On October 12, 2005, a Family Part judge entered a consent

order modifying the parties’ judgment of divorce to incorporate

the written PSA. From 2005 until 2009, the parties followed the

terms of the PSA, and plaintiff paid his support payments

directly to defendant.

In 2009, A.B., at the age of twenty-one, finished his

education at a state-funded, special needs school, N.J.S.A.

18A:46-6, -13, and began attending a school in Connecticut for

persons with special needs. A.B.’s enrollment in the out-of-

state program gave rise to the current litigation.

5
 II.

On November 20, 2009, plaintiff filed a notice of motion in

the Superior Court, Family Part, seeking to direct his child

support payments for A.B. into a special needs trust.

Specifically, he requested the court: (1) “[e]stablish[] a

Special Needs Trust to fund the educational and living expenses

of [A.B.] at [the Connecticut school]”; (2) appoint a parent

coordinator to assist in establishing the trust; (3) compel

defendant to cooperate in the creation of the trust; (4) split

the cost of the parent coordinator equally with defendant; (5)

“eliminate[] any direct child support obligation to Defendant

for the benefit of [A.B.], retroactive to the filing date of the

application, based upon the recent enrollment of [A.B.] in a

full-time residential facility”; (6) determine the financial

contributions of the parties towards A.B.’s educational expenses

on a proportional basis; (7) modify the PSA to decrease the

amount of life insurance coverage plaintiff is required to

maintain and compel defendant to maintain life insurance on her

life for A.B.; (8) compel defendant to pay for counsel fees; and

(9) provide other relief.

In his certification supporting the motion, plaintiff

related that he was no longer an owner of his agency and no

longer earned the same salary as he earned at the time of the

divorce. He also suggested the parties should prepare for the

6
possibility of his untimely death. Plaintiff also related that

A.B. now resides at a school and, therefore, child support

payments should not be made directly to defendant. Plaintiff

further asserted that A.B. is not financially prepared for “a

time when [plaintiff is] earning less income and ha[s] fewer

available resources.” Finally, plaintiff asserted that A.B.

will be ineligible for certain governmental benefits, including

Supplemental Security Income (SSI) and Medicaid, if the child

support payments are not paid into a special needs trust.

Plaintiff stated that A.B. “may be eligible for certain

government benefits programs now and in the future.” Plaintiff

submitted a letter from an attorney with whom both parents

consulted that outlined the purpose of a special needs trust and

the government benefits and programs in which A.B. could

participate.

In her response to plaintiff’s motion and in support of her

cross-motion to determine the parental financial obligation for

A.B. and M.B., who was applying for college admission at that

time, defendant informed the court she did not object to the

formation of a special needs trust and, in fact, had already

attempted to form one with funds A.B. received from his maternal

grandfather. She did, however, object to the termination of

direct payment of child support to her before A.B. became

eligible for government benefits and programs.

7
 The trial court denied plaintiff’s motion to establish a

special needs trust, finding plaintiff failed to show changed

circumstances warranting relief from the terms of the PSA. The

court found “[t]he parties absolutely knew that [A.B.] was not

going to be emancipated” and, therefore, the parties

contemplated that plaintiff would always pay at least $50,000 in

child support for A.B. The court also found plaintiff had a

life insurance policy in place that would benefit A.B. in the

case of the “unfortunate demise” of plaintiff. The trial court

emphasized that the parties negotiated the inclusion of life

insurance at “arms length.”

Plaintiff appealed the trial court’s denial of his motion

to redirect his support obligation into a special needs trust.

Plaintiff also raised the issue of whether the trial court, on

its own motion, should have appointed a guardian ad litem for

A.B.

The Appellate Division affirmed the trial court’s denial of

plaintiff’s motion to allow payment of child support into a

special needs trust. In affirming the trial court’s

determination, the panel acknowledged the standard for

modification of the PSA is changed circumstances and noted

plaintiff did not demonstrate any circumstances to warrant

modification of the PSA.

8
 The panel determined that the parties entered into the PSA

with an understanding of A.B.’s future needs, that child support

payments would cover A.B.’s day-to-day needs exclusive of

schooling, and that “[t]he amount struck by the parties of

$50,000 per year in child support reflected that understanding.”

The panel noted plaintiff further understood he would be

responsible for the cost of A.B.’s special education.

The appellate panel remarked that plaintiff’s arguments in

favor of modification, such as a decrease in salary, were mired

in hypotheticals. Additionally, the appellate panel noted that

the parties contemplated many of the situations set forth by

plaintiff. In regard to the assertion that plaintiff may die

prematurely, the panel referred to plaintiff’s agreement in the

PSA to maintain a life insurance policy to benefit A.B.

The panel also remarked that the parties could have

established a special needs trust in the PSA but chose not to do

so. Instead, they chose to name A.B. as the beneficiary of a

$2.5 million life insurance policy. The parties also

contemplated that, one day, plaintiff would be responsible for

the costs of A.B.’s special needs education. The parties

understood that A.B. would likely not be emancipated and,

therefore, that plaintiff’s obligations would remain throughout

his lifetime.

9
 In regard to the governmental benefits available to A.B.,

the panel concluded that the facts presented did not establish

with certainty that A.B. would be eligible for governmental

benefits if plaintiff paid child support into a special needs

trust. The panel characterized plaintiff’s motion as “a self-

serving effort to revise the terms of the PSA to make them more

favorable to him” and affirmed the denial of his motion.

The panel similarly rejected plaintiff’s argument that the

trial judge should have, sua sponte, appointed a guardian ad

litem for A.B. The panel concluded that Rule 4:26-2 only

applies to minors or incapacitated persons who are parties to an

action. A.B. is not a party to the action. It also concluded

that this case does not involve a parenting time or custody

dispute for which Rules 5:8A and 5:8B would allow the court to

appoint a guardian ad litem. The panel determined this case was

ultimately about modification of child support that did not

warrant appointment of a representative for A.B.

This Court granted plaintiff’s petition for certification.

210 N.J. 217 (2012). We also granted Legal Services of New

Jersey’s (Legal Services) motion to participate as amicus

curiae.

III.

A.

10
 Plaintiff asserts that “[s]pecial needs planning is

available to special needs children regardless of their wealth.”

He further asserts that he wishes to pay his child support into

a special needs trust to make A.B. eligible for governmental

benefits. Plaintiff states that he is not attempting to

terminate his child support, instead he simply wants to redirect

any child support he pays into a special needs trust in order to

permit A.B. to qualify for means-tested benefits. He asserts

A.B. is the true beneficiary of the modification.

Plaintiff argues that the Appellate Division’s opinion

forecloses A.B. from ever receiving governmental benefits

without his mother’s consent. Plaintiff contends that the

Appellate Division’s “precedent is dangerous not only to the

parties, but even more so to other families who do not have

significant financial means.” He argues that a parent would be

unable to prepare for the future of a special needs child

without the consent of the other parent.

According to plaintiff, although courts should uphold PSAs,

the needs of a child should not be limited by his or her

parents’ agreements. Plaintiff states that the courts should

have modified any terms “that were detrimental to [A.B.]” in the

exercise of its parens patriae responsibility to protect the

interests of children by scrutinizing consensual agreements. He

11
states that the court should be driven by the best interests of

the child.

Further, plaintiff asserts that, without the representation

by a guardian ad litem, “[A.B.] is . . . being deprived of his

constitutional right to governmental benefits without due

process.” He argues that “[a] guardian ad litem would be

equipped to represent the best interest of [A.B.] before the

court rather than his parents whose applications focused on the

conflict between the two of them.”

B.

Defendant responds that plaintiff is attempting to

terminate rather than modify his child support obligations.

Nonetheless, defendant argues that the circumstances do not

warrant an alteration to the PSA, a document which the parties

took a long time to consider. She argues that, at the time of

the creation of the PSA, the parties had “a full understanding

of their child’s special needs” and made detailed preparations

for A.B.’s care.

Defendant contends that A.B.’s interests are protected by

enforcement of the PSA and by “ensuring that [A.B.] would not be

relegated to a level of support provided by means tested

government programs.” She emphasizes that A.B.’s needs should

be met “in accordance with the standard of living enjoyed by

both of [his] parents.” She asserts that the court’s ruling was

12
proper, considering plaintiff failed to present a plan of how

A.B. would be supported without direct payment to defendant or

whether A.B. even qualified for governmental benefits.

Defendant also contends that, under the statutory language, she

would not have access to the funds to pay for food or clothing

for A.B.

Finally, defendant asserts that the Appellate Division

properly determined that a guardian ad litem was not necessary

in this case and agrees that this appeal is about nothing other

than child support.

C.

Amicus curiae Legal Services argues that “the child support

statute, the child support guidelines, and the state and federal

laws on special needs trusts” all authorize the payment of child

support to a special needs trust instead of directly to the

custodial parent. Legal Services points to the 2005 amendment

to the child support statute, see L. 2005, c. 171, § 1 (codified

as amended at N.J.S.A. 2A:34-23(a)), which directs that child

support continue past the age of twenty-one for the disabled

child and authorizes courts to order the creation of a trust.

That amendment, Legal Services argues, “broadened the scope of

authority . . . to generally promoting the well-being of the

disabled adult child.”

13
 Turning specifically to special needs trusts, Legal

Services contends that those trusts are specifically allowed to

enable a disabled person to enjoy a better standard of living.

It argues that special needs trusts have been affirmed as a tool

“to undertake planning to preserve assets and maximize public

benefits.”

Legal Services analogizes this case to In re Keri, 181 N.J.

50, 61-62 (2004), where this Court held that, “when a Medicaid

spend-down plan does not interrupt or diminish a ward’s care,

involves transfers to the natural objects of the ward’s bounty,

and does not contravene an expressed prior intent or interest,

the plan, a fortiori, provides for the best interests of the

ward and satisfies the law’s goal to effectuate decisions an

incompetent would make if he or she were able to act.” Legal

Services suggests the standard articulated in Keri may be

instructive here.

Legal Services also contends that the Legislature intended

to encourage the creation of special needs trusts to enable

persons with disabilities to benefit from government programs,

while still receiving supplemental support. According to Legal

Services, although plaintiff would not gain financially, the

benefits to A.B. would be significant. Legal Services argues

that “[t]he total financial benefit of obtaining SSI and the

related Medicaid, in New Jersey[,] is approximately $30,000.00

14
. . . annually.” Legal Services does recognize, however, that

here, where plaintiff agreed to continue providing health

insurance for A.B., the value of Medicaid is not readily

apparent.

IV.

In order to evaluate whether the trial court should have

modified the child support agreement to allow plaintiff to pay

child support directly into a special needs trust, we begin with

a general examination of special needs trusts.

A.

A special needs trust is a trust that is intended to allow

a disabled individual to maintain eligibility for certain needs-

based government benefits.2 See Waldman v. Candia, 317 N.J.

Super. 464, 472 (App. Div.), certif. granted, 158 N.J. 686

(1999), appeal dismissed, 166 N.J. 599 (2000). The use of

special needs trusts to protect eligibility for government

benefits was first authorized by Congress when it passed the

federal Omnibus Budget Reconciliation Act of 1993 (OBRA ‘93),

Pub. L. No. 103-66, § 13611(b), 107 Stat. 312, 625 (codified as

2
Our discussion is confined only to a special needs trust
because plaintiff’s motion discussed only that type of trust.
This Court recognizes that other types of trusts may be suitable
to address the needs of disabled, dependent children. See Gary
Mazart & Regina M. Spielberg, Trusts for the Benefit of Disabled
Persons: Understanding the Differences Between Special Needs
Trusts and Supplemental Benefits Trusts, N.J. Law. Mag., Feb.
2009, at 25-26 (discussing supplemental benefits trusts).

15
amended at 42 U.S.C.A. § 1396p(d)). OBRA ‘93 identified certain

types of trusts into which disabled individuals, or persons

acting on behalf of such individuals, can place assets without

those assets becoming “available assets” for purposes of

determining Medicaid eligibility. See ibid. One such trust is

what is known as a special needs trust. See 42 U.S.C.A. §

1396p(d)(4)(A). In 1999, Congress extended the protections

afforded by the use of a special needs trust, finding that the

contents of that type of trust are not considered “resources” or

“assets” for purposes of determining eligibility for SSI. See

Act of Dec. 14, 1999, Pub. L. No. 106-169, § 205(a), 113 Stat.

1822, 1833 (codified as amended at 42 U.S.C.A. §

1382b(e)(6)(C)(i)).

Recognizing that the law in New Jersey did “not

specifically authorize the establishment of these trusts[,]”

N.J.S.A. 3B:11-36(d), in 2000, the Legislature adopted N.J.S.A.

3B:11-37(b). L. 2000, c. 96, §§ 1, 3. The statute provides

that, “[u]pon the request of an interested party, a court may

establish an OBRA ‘93 trust for a person who is disabled . . .

and may direct that the assets of the person with a disability

be placed in the OBRA ‘93 trust.” N.J.S.A. 3B:11-37(b).

The contents of a special needs trust, however, may be

excluded from the disabled person’s income calculation only if

the trust satisfies certain specific requirements. See N.J.A.C.

16
10:71-4.11(g)(1). The most important requirement, recognized at

both the state and federal level, is that the state must

“receive all amounts remaining in the trust upon the death” of

the trust beneficiary “up to an amount equal to the total

medical assistance paid on behalf of the individual under a

State plan.” 42 U.S.C.A. § 1396p(d)(4)(A); accord N.J.A.C.

10:71-4.11(g)(1)(xii). The implementing regulations contain

additional requirements for a trust to qualify as a special

needs trust. See generally N.J.A.C. 10:71-4.11(g)(1)(i)-

(xviii). The trust must “specifically state that the trust is

for the sole benefit of the trust beneficiary[,]” N.J.A.C.

10:71-4.11(g)(1)(ii), and the trust must be irrevocable,

N.J.A.C. 10:71-4.11(g)(1)(viii). The trust must also

“specifically state that its purpose is to permit the use of

trust assets to supplement, and not to supplant, impair or

diminish, any benefits or assistance of any Federal, State or

other governmental entity for which the beneficiary may

otherwise be eligible or which the beneficiary may be

receiving.” N.J.A.C. 10:71-4.11(g)(1)(iii). A special needs

trust is meant to supplement, rather than supplant, government

benefits; therefore, if the money placed in a special needs

trust is used for “food, clothing or shelter,” those

expenditures will be considered in-kind support and maintenance

and will count as a set amount of income attributable to the

17
child. N.J.A.C. 10:71-4.11(g)(1)(iii)(1), -5.4(a)(12); see also

Mazart & Spielberg, Trusts for Disabled Persons, supra, at 24

(discussing special needs trusts).

Individuals other than the beneficiary may place assets

into a special needs trust. On the other hand, such a trust

only qualifies as an OBRA ‘93 trust if it contains the assets of

the beneficiary. See 42 U.S.C.A. § 1396p(d)(4)(A) (noting

exception applies to “trust containing the assets of an

individual under age 65 who is disabled”). In New Jersey,

“child support belongs to the child[,]” Pascale v. Pascale, 140

N.J. 583, 591 (1995); accord Martinetti v. Hickman, 261 N.J.

Super. 508, 512 (App. Div. 1993); therefore, child support paid

directly to a parent is considered an asset of the child in the

nature of unearned income and will disqualify the child for

government benefits, see Mazart & Spielberg, Trusts for Disabled

Persons, supra, at 29-30.

Because of the protection a special needs trust affords

disabled individuals, it can be used as an effective tool to

plan for the future of a disabled minor or adult child. See

Jennifer Brannan, Comment, Third-Party Special Needs Trust:

Dead or Alive in a Uniform Trust Code World, 16 Tex. Wesleyan L.

Rev. 249, 250-51, 255-56 (Winter 2010). The effectiveness of

special needs trusts has led to express recognition of their

importance by the majority of states, including New Jersey. See

18
N.J.S.A. 3B:11-36(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.”); see also In re Jennings v.

Comm’r, N.Y.S. Dep’t of Social Servs., 893 N.Y.S.2d 103, 109

(App. Div. 2010) (explaining that New York Legislature codified

supplemental needs trust3 definition in N.Y. Est. Powers & Trusts

Law § 7-1.12); In re Riddell Testamentary Trust, 157 P.3d 888,

893 (Wash. Ct. App. 2007) (“The law invites, rather than

discourages, the creation of special needs trusts . . . .”);

Parkhurst v. Wilson-Coker, 848 A.2d 515, 516-17, 519-21 (Conn.

App. Ct. 2004) (explaining purpose of special needs trusts).

Indeed, in Hamilton v. Laine, 67 Cal. Rptr. 2d 407, 408 (Ct.

App. 1997), the Court of Appeal of California provided an

example illustrating the benefits of a special needs trust:

Without [a] special needs trust, if the
minor’s cost of care is $6,000 and the month
annuity is $5,000, the annuity pays the
first $5,000 of the minor’s cost of care and
[Medicaid] covers the $1,000 difference.
With [a] special needs trust, [Medicaid]
covers the entire $6,000 and the $5,000
monthly annuity can then be used for the
minor’s special needs.

Despite the benefits, there are reasons why parents may

choose not to employ use of a special needs trust and may

3
Some jurisdictions refer to special needs trusts as
supplemental needs trusts. Both are distinguishable from
supplemental benefits trusts.

19
instead choose to fund their child’s future directly. Direct

parental support avoids the use limitations placed on funds in

special needs trusts. See Craig P. Goldman, Render unto Caesar

That Which Is Rightfully Caesar’s, but not a Penny More than You

Have To: Supplemental Needs Trusts in Minnesota, 23 Wm.

Mitchell L. Rev. 639, 674 (1997) (“For example, money may not be

spent for the benefit of others and thus the funds could not be

used to pay for travel of family members to visit the

beneficiary . . . or to pay for the college education or wedding

of another child.” (Alteration in original) (internal quotation

marks omitted)). Opting not to create a special needs trust

also

eliminates governmental intrusions into
private family matters, avoids disputes
about eligibility for government benefits
during the life of the adult child with a
disability, does not require an
understanding of Medicaid and SSI, and
allows parents to fulfill what they may view
as their moral obligation to provide for
their child.

[Gail C. Eichstadt, Essay, Using Trusts to
Provide for the Needs of an Adult Child with
a Disability: An Introduction to Family
Concerns for Lawyers and a Primer on Trusts
for Parents, 45 S.D. L. Rev. 622, 637
(1999/2000).]

V.

20
 With that understanding of special needs trusts in mind, we

next turn to the law regarding modification of child support

arrangements, beginning with the appropriate standard of review.

A.

“When reviewing decisions granting or denying applications

to modify child support, we examine whether, given the facts,

the trial judge abused his or her discretion.” Jacoby v.

Jacoby, 427 N.J. Super. 109, 116 (App. Div. 2012). The trial

court’s “‘award will not be disturbed unless it is manifestly

unreasonable, arbitrary, or clearly contrary to reason or to

other evidence, or the result of whim or caprice.’” Ibid.

(quoting Foust v. Glaser, 340 N.J. Super. 312, 315-16 (App. Div.

2001)).

B.

“New Jersey has long espoused a policy favoring the use of

consensual agreements to resolve marital controversies.”

Konzelman v. Konzelman, 158 N.J. 185, 193 (1999). Courts

recognize the contractual nature of those matrimonial

agreements. Pacifico v. Pacifico, 190 N.J. 258, 265 (2007). As

contracts, PSAs should be enforced according to the original

intent of the parties. Id. at 266. Therefore, as a general

rule, “absen[t] . . . unconscionability, fraud, or overreaching

in negotiations of the settlement,” a trial court has “no legal

or equitable basis . . . to reform the parties’ property

21
settlement agreement.” Miller v. Miller, 160 N.J. 408, 419

(1999).

PSAs, however, “must reflect the strong public and

statutory purpose of ensuring fairness and equity in the

dissolution of marriages.” Id. at 418. As such, courts

historically have maintained “[t]he equitable authority” to

modify child support agreements privately reached between

parties. Conforti v. Guliadis, 128 N.J. 318, 323 (1992); see

also Patetta v. Patetta, 358 N.J. Super. 90, 95 (App. Div. 2003)

(“While courts are predisposed to uphold property settlement

agreements, this enforceability is subject to judicial

supervisory control.” (citations omitted)); N.J.S.A. 2A:34-23

(support orders “may be revised and altered by the court from

time to time as circumstances may require”). Allowing such

modification ensures that the arrangements are “fair and just”

to all parties involved. See Petersen v. Petersen, 85 N.J. 638,

642 (1981).

When a party to a comprehensive negotiated PSA seeks to

modify any support obligation, that party must meet the

threshold standard of changed circumstances. Lepis v. Lepis, 83

N.J. 139, 146-48 (1980). Events that qualify as changed

circumstances to justify an increase or decrease of support

include an increase in the cost of living, an increase or

decrease in the income of the supporting or supported spouse,

22
cohabitation of the dependent spouse, illness or disability

arising after the entry of the judgment, and changes in federal

tax law. Id. at 151. In addition, an increase in the needs of

a child or emancipation of a child may constitute changes in

circumstances that will trigger an examination of the support

obligation. Id. at 151-52.

Changed circumstances are not confined to events unknown or

unanticipated at the time of the agreement. Dolce v. Dolce, 383

N.J. Super. 11, 19 (App. Div. 2006). On the other hand, care

must be taken not to upset the reasonable expectations of the

parties. Ibid. When a PSA addresses the changed circumstance,

modification of the PSA may not be equitable or fair. Lepis,

supra, 83 N.J. at 153. When one or both parents have agreed to

undertakings advantageous to a child beyond that minimally

required, the public policy favoring stability of arrangements,

see Smith v. Smith, 72 N.J. 350, 360 (1977); Dolce, supra, 383

N.J. Super. at 20, usually counsels against modification.

The threshold changed circumstances standard assumes that

the parties addressed the event precipitating the application to

modify provisions of a PSA. In some instances, the parties will

acknowledge the existence of certain facts, express a desire to

meet the needs of a child, or fashion a solution to the

acknowledged issues but defer the resolution of these issues

until a later date. In such a situation, the changed

23
circumstances standard does not operate as a threshold barrier

to address the motion before the court; the guiding principle

for consideration of the motion is the best interests of the

child. That same principle informs consideration of a motion to

modify a negotiated comprehensive PSA once the party seeking

modification demonstrates changed circumstances.

VI.

A.

Statutes and case law have recognized for some time that

creation of a trust to permit continuation of support of a

dependent spouse or child should be permitted in appropriate

circumstances. See N.J.S.A. 3B:11-36 to -37 (authorizing

creation of special needs trust for disabled person); N.J.S.A.

2A:34-23 (authorizing “creation of trusts . . . to assure

payment of reasonably foreseeable medical and educational

expenses”); see also Jacobitti v. Jacobitti, 135 N.J. 571, 574-

75 (1994) (approving creation of trust to secure spousal

support). Nonetheless, this case presents our first opportunity

to consider under what circumstances a parent may modify a child

support obligation by establishing a special needs trust for a

dependent child in place of some or all of the terms of an

existing negotiated agreement.

Plaintiff’s application to establish a special needs trust

and to fund it with child support now payable to defendant

24
implicates certain basic principles regarding agreements that

conclude a marriage and that govern the obligations and

expectations of the parties to those agreements. We encourage

divorcing parents to anticipate the needs of their children

beyond the parents’ and children’s present circumstances and

needs, and we must respect the reasonable expectations of the

parties. On the other hand, we must guard against effectively

freezing the means of providing for a child’s welfare to the

plan adopted at one point in time and eliminating the

possibility of crafting a support scheme more responsive to the

needs of an adult, disabled child. Indeed, this Court has

recognized for some time that the increased needs of a child

should be considered a changed circumstance. Lepis, supra, 83

N.J. at 151-52. We must also recognize that even the most

thoughtful parents may not anticipate every future event. Their

disabled child may or may not develop the skills required to

live in an independent or semi-independent living arrangement.

As the parents age, they may realize that their physical or

financial resources cannot provide the level of care required by

the adult, disabled child. Moreover, changes in the terms and

conditions of employment of one or both parents may compromise

the scheme devised years before to provide for the current and

future needs of their child. Modification of a fully negotiated

25
agreement for the support of any adult, disabled child should

not be undertaken lightly.

Thus, when parents develop a plan that addresses the needs

of their child or children that may be more advantageous to the

child or children as they and their parents’ age, it should not

be rejected out-of-hand because the parents have a negotiated

plan in place. Moreover, when the parties have a fully

negotiated agreement but have deferred some issues, such as

payment for post-secondary education or future support for a

disabled, dependent child, care must be taken that the best

interests of the child standard is applied to allow full

consideration of a proposal that addresses the future needs of

the dependent, disabled child.

We reemphasize that “[t]he right to child support belongs

to the child.” Pascale, supra, 140 N.J. at 591; accord

Martinetti, supra, 261 N.J. Super. at 512. The parent who

receives the support is obliged to expend the funds to support

the child. See J.S. v. L.S., 389 N.J. Super. 200, 205 (App.

Div. 2006) (“The purpose of child support is to benefit

children, not to protect or support either parent.”), certif.

denied, 192 N.J. 295 (2007). A special needs trust in

conjunction with a thoughtful plan to gain eligibility and

receipt of government benefits, including Medicaid, SSI, and

Division of Developmental Disability (DDD) programs, permits a

26
family to provide health care, income, housing, and vocational

services for their disabled, dependent child. The redirection

of a child support obligation from a parent to a trust designed

to meet the present and future needs of the dependent, disabled

child should not be considered exceptional or extraordinary

relief, if such a plan is in the best interests of the

unemancipated child.

B.

In this matter, the original PSA deferred certain issues,

such as payment of post-secondary education, and reserved the

right of either party to seek appropriate relief from the court.

The PSA was amended in October 2005 to incorporate certain

agreements about future financial provisions for A.B. but

reserved for a later date discussions about whether a life

insurance trust or a special needs trust should be established

for A.B. While plaintiff committed to permitting A.B. to

receive post-secondary educational opportunities, he did not

commit to fully fund that level of education or all future

financial needs of his son. Plaintiff’s application to

establish a special needs trust for the future financial needs

of A.B. should have been evaluated in accordance with the best

interests of the child standard.

Plaintiff, however, failed to present a detailed plan by

which the trial court could evaluate whether a special needs

27
trust furthers the best interests of A.B. Plaintiff presented

little more than a concept. Such a sparse presentation did not

permit the Family Part judge to reach an informed decision on

whether continuation of the existing support provisions from the

PSA are in the best interests of A.B. as he matures and moves

beyond special education and transitional education programs.

Plaintiff provides $50,000 each year to defendant for the

support of A.B. Plaintiff also maintains A.B.’s health

insurance and holds a $2.5 million life insurance policy for

A.B.’s benefit. The child support is a considerable sum of

money to provide for A.B.’s current needs, and the life

insurance proceeds will provide a considerable sum of money to

care for A.B. on his father’s death. But A.B.’s needs are also

considerable, and the record contains little information that

addresses the fundamental question whether the funds currently

paid for his support are sufficient to meet all of his needs.

The record merely suggests that gaining eligibility for

government programs, such as Medicaid, SSI, and DDD, are better

suited to meeting the long-term needs of A.B.

A parent seeking to alter a negotiated agreement for the

financial support of a disabled child or seeking court approval

of a plan to address deferred and unresolved issues concerning

the support of a dependent, disabled child must present a

specific plan and demonstrate how the proposed trust will

28
benefit the disabled child. At a minimum, the Family Part judge

must have a complete understanding of the current physical,

psychological, educational, vocational, and recreational needs

of the dependent, disabled child, the cost to support those

needs, and the resources available to fund those needs. If the

plan relies on access to government benefits, the Family Part

judge must be presented with a specific plan that addresses,

among other considerations, eligibility rules, the time it will

take to gain eligibility, and how long it will take to access

benefits once eligibility is established. The plan must address

the means of defraying current costs without compromising the

child’s benefits eligibility. The plan must also address the

terms and conditions for disbursement of the corpus of the trust

and designate a trustee.

The plan presented by plaintiff meets none of those

requirements. Due to the manifest deficiencies of the

application presented by plaintiff, the Appellate Division

properly affirmed the order denying plaintiff’s motion.

VII.

Although we have determined that plaintiff presented an

inadequate plan to warrant modification or amendment of the PSA

by the trial court, the record indicates that both parents

recognize the wisdom of creating a plan to provide for the needs

of their son now and as he and they grow older. We, therefore,

29
address whether and under what circumstances a guardian ad litem

should be appointed for a dependent, disabled child who is the

subject of a proposed special needs trust.

The need for an independent person to review certain

applications that will affect the interests of a dependent and

unemancipated child has been recognized by legislation and court

rule. Our court rules contemplate the appointment of a guardian

ad litem in two contexts: an action to determine the incapacity

of a person, R. 4:86; and actions to resolve custody or

parenting time/visitation disputes, R. 5:8B. “[T]he basic role

of the guardian ad litem is to assist the court in its

determination of the incompetent’s or minor’s best interest.”

Adoption of a Child by E.T., 302 N.J. Super. 533, 539 (App.

Div.), certif. denied, 152 N.J. 12 (1997); accord In re M.R.,

135 N.J. 155, 175 (1994).

There are other contexts in which either a law guardian

will be appointed or a third party will be required to conduct

an investigation to assure that the best interests of the child

or children are advanced and protected. For example, a law

guardian will be appointed for a child who is the subject of an

abuse or neglect proceeding or a termination of parental rights

proceeding. N.J.S.A. 9:6-8.21(d), -8.23; N.J.S.A. 30:4C-

30
15.4(b).4 In an adoption proceeding where the child is received

through private placement rather than from an approved agency,

an approved agency must be appointed to investigate the

circumstances of the placement and to perform an evaluation of

the child and the adopting parents. N.J.S.A. 9:3-48(a)(2).5 No

rule or statute, however, directly speaks to the situation here.

Certainly not every application affecting an unemancipated

child requires appointment of a guardian ad litem. See R. 5:8B

(“In all cases in which custody or parenting time/visitation is

an issue, a guardian ad litem may be appointed . . . if the

circumstances warrant such an appointment.” (Emphasis added)).

The decision to appoint a guardian ad litem is reposed in the

discretion of the trial judge, see In re M.R., supra, 135 N.J.

at 179, and rightly so because the decision is informed by the

experience the judge gains as the judge sifts through a daily

docket of contested matters. A judge is also charged with

protecting the best interests of a child. The judge should not

hesitate, therefore, to appoint a person to permit the

4
The basic role of the law guardian is to serve as an advocate
for the minor child.
5
N.J.S.A. 2A:4A-92 also authorizes a Court Appointed Special
Advocate (CASA) program in each vicinage. See also Rule 5:8C
(authorizing appointment of special advocate from CASA program
to assist Family Part judge in determining best interests of
child); Administrative Directive #05-13 (July 16, 2013) (noting
that CASA volunteers gather information about children who have
been removed from their homes due to abuse or neglect and
present that information to court).

31
dependent, disabled child to have a voice in an application that

may so fundamentally affect his or her future. In certain

situations, a court-appointed expert well-versed in special

needs trusts may be the appropriate response. When one parent

resists an application by the other parent to establish a trust

that may offer more financial security to the disabled,

unemancipated child as the child matures, the judge should

seriously consider resorting to the various available resources

to protect the best interests of the child.

In this case, however, as plaintiff’s application was

presented to the court, we conclude that the trial judge did not

mistakenly exercise the discretion reposed in him to appoint a

guardian ad litem or other resource to investigate and report

whether a special needs trust would protect and advance the best

interests of A.B. The plan was entirely speculative and lacked

the detail to permit an informed decision on whether it

protected and advanced the best interests of A.B. When either

parent submits a plan that permits an informed decision, the

trial court should consider appointment of a guardian ad litem

or other resource person, particularly if there is a suggestion

that the parent proposing the trust is seeking to minimize the

obligation to support A.B. or that defendant considers the child

support currently paid to her as anything other than funds for

the exclusive support of A.B.

32
 VIII.

The judgment of the Appellate Division is affirmed as

modified.

CHIEF JUSTICE RABNER; JUSTICES LaVECCHIA, ALBIN, HOENS and
PATTERSON; and JUDGE RODRÍGUEZ (temporarily assigned) join in
JUDGE CUFF’s opinion.

33
 SUPREME COURT OF NEW JERSEY

NO. A-111 SEPTEMBER TERM 2011

ON CERTIFICATION TO Appellate Division, Superior Court

J.B.,

Plaintiff-Appellant,

v.

W.B.,

Defendant-Respondent.

DECIDED August 20, 2013
Chief Justice Rabner PRESIDING
OPINION BY Judge Cuff (temporarily assigned)
CONCURRING/DISSENTING OPINIONS BY
DISSENTING OPINION BY

AFFIRMED AS
CHECKLIST
MODIFIED
CHIEF JUSTICE RABNER X
JUSTICE LaVECCHIA X
JUSTICE ALBIN X
JUSTICE HOENS X
JUSTICE PATTERSON X
JUDGE RODRÍGUEZ (t/a) X
JUDGE CUFF (t/a) X
TOTALS 7