S3076

Sponsored by:

Senator BENJIE E. WIMBERLY

District 35 (Bergen and Passaic)

SYNOPSIS

Permits portion of child support payments to be held in trust for child to access upon certain circumstances.

CURRENT VERSION OF TEXT

Introduced Pending Technical Review by Legislative Counsel.

An Act concerning child support and supplementing Title 2A of the New Jersey Statutes.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. a. Upon the agreement of the parties to any matrimonial action or action for dissolution of a civil union brought in this State, or after judgment of divorce or dissolution or maintenance, the court may order, in accordance with the court’s authority pursuant to N.J.S.2A:34-23, that a portion, not to exceed 10 percent, of the total amount to be paid by a parent for support of a child of the parties over the period during which the duty of support is owed be placed in an irrevocable trust created in accordance with N.J.S.3B:31-1 et seq., the “Uniform Trust Code.” The court shall not increase the amount to be paid by a parent for support of the child solely because of an agreement created pursuant to this subsection.

b. (1) The trust created pursuant to subsection a. of this section shall establish any child who is the basis for a child support payment as a beneficiary. “Beneficiary” shall have the same meaning as defined in N.J.S.3B:31-3.

(2) The court shall, upon recommendation of the parties to the action before the court, appoint a trustee. “Trustee” shall have the same meaning as defined in N.J.S.3B:1-2 and N.J.S.3B:31-3.

c. The court shall have the authority to:

(1) notwithstanding N.J.S.3B:31-27, amend the terms of the trust as it relates to the portion of child support payment to be placed in the trust from time to time as circumstances may require based on the factors considered in subsection a. of N.J.S.2A:34-23; and

(2) appoint a special fiduciary to take possession of the trust property and administer the trust if the court finds that the trustee is not acting in good faith or in accordance with the purposes of the trust.

d. The distribution of the income or principal that the trustee is required to make to a beneficiary shall occur upon the age which the terms of the trust establish, and if no age is established, upon a beneficiary turning 18 years of age.

e. (1) The trustee appointed in accordance with subsection b. of this section shall administer the trust with undivided loyalty to and solely in the best interest of the beneficiaries. The trustee of a trust established in accordance with subsection a. of this section shall have all powers and duties as provided for in N.J.S.3B:31-1 et seq..

(2) The beneficiary of the trust shall have all powers and duties provided for in N.J.S.3B:31-1 et seq..

2. This act shall take effect immediately.

STATEMENT

This bill permits a portion of a child support payment to be placed in irrevocable trust.

Under the bill, and upon agreement of the parties to an action before the court which results in the establishment of a child support payment, the court may direct up to 10 percent of every child support payment to be placed in an irrevocable trust. The trust assets would be distributable to a beneficiary upon the beneficiary turning 18 years of age, or the age at which the trust establishes. If the parties agree to the trust, every child who is the basis for a child support payment is required to be established as a beneficiary of the trust.

Finally, the bill provides the court the ability to:

(1) amend the terms of the trust as it relates to the portion of child support payment to be placed in the trust from time to time as circumstances may require based on the factors considered in N.J.S.A.2A:34-23; and