Special Needs Trust Attorney in Arizona

People with disabilities may need expensive care and support throughout their lives. The cost of such care may become more than many families can afford, leading to concerns about ensuring a loved one’s quality of life once they can no longer serve as caregivers or provide support. Fortunately, estate planning tools like special needs trusts can allow families to secure the financial resources they need for a loved one with special needs.

To discuss the suitability of a special needs trust to protect your loved one’s rights and interests with an experienced estate planning attorney, contact us today at Mushkatel, Gobbato, & Kile, P.L.L.C. Our team has over 50 years of combined legal knowledge and experience to put at your disposal. When you work with us, you can expect a small firm’s personalized, caring attention combined with the experience and resources more commonly found in big law firms.

What Is Meant by Special Needs?

People may have “special needs” when they have a physical, behavioral, emotional, or cognitive disability or impairment. Because of the impairment, they may require additional or specialized care, support services, and other assistance. For instance, individuals with special needs may require intensive medical care and personal assistance, such as home health services, personal aides, mobility equipment, and in-home disability accommodations like wheelchair ramps.

What Are the Benefits of Creating an Arizona Special Needs Trust?

Arizona special needs trusts offer various benefits to individuals with physical or mental disabilities and their families, including the following:

• Ensuring eligibility for public benefits — Special needs trusts can reduce the total value of a disabled individual’s estate, allowing them to qualify for means-tested public benefits such as Medicaid or Supplemental Security Income. Eligibility for those programs depends on meeting income and asset criteria.
• Facilitating family support — Special needs trusts also offer families the ability to provide financial support to disabled loved ones, which can become critical when caregiver family members become unable to continue caring for a disabled individual.
• Setting aside resources for care — Trusts also enable families to preserve financial resources to ensure the continuity of a disabled individual’s care if they lose access to government benefits.

How Does a Special Needs Trust Work in Arizona?

In Arizona, a special needs trust refers to a trust established to benefit one or more individuals with disabilities or other special needs and ensure the beneficiary’s quality of life. A person may qualify for a special needs trust if they have a disability that causes a long-term physical or mental impairment that prevents the person from obtaining and maintaining gainful employment.

A disabled individual’s family can create a special needs trust that names the individual as the beneficiary. The trust also must have a trustee responsible for managing the trust’s assets and distributing principal and income from those assets, including upon the beneficiary’s death, per the trust’s terms and state law.

What Are the Different Types of Special Needs Trusts?

Special needs trusts fall into the two following categories, which are based on the source of funding for the trust:

• First-party trust

Assets belonging to the special needs individual, the trust’s primary beneficiary, provide the funds for this trust. For example, the first-party trust could hold a residence, personal injury settlement, workers’ compensation settlement, inheritance, or gift to reduce the total value of the special needs individual’s estate below the maximum limit to qualify for public benefits offered through federal programs like Medicaid.

First-party special needs trusts must meet specific criteria in Arizona, including:

• The trust must hold only assets belonging to the special needs individual. The trust cannot receive assets from another party.
• Trust must be formed before the special needs individual turns 65.
• A parent, grandparent, or court-appointed guardian must establish it.
• The trust must designate the state as the primary beneficiary of any assets remaining in the trust upon the individual’s death to reimburse the state for any benefits provided to the individual.

• Third-party trust

This type of special needs trust receives funding from sources other than a special needs individual, such as the individual’s parents, grandparents, or other family members. Third-party trusts can provide special needs individuals with additional financial resources to pay expenses not covered by Medicaid or other government benefits to help increase the individual’s quality of life. Because assets in a third-party trust never belonged to the special needs individual, the trust does not need to designate the state as the trust’s primary beneficiary upon the individual’s death. Instead, the family member creating the trust can designate other family members as final beneficiaries.

Will a Special Needs Trust Affect SSI or Medicaid Benefits?

When correctly set up and operated, a special needs trust can preserve a disabled individual’s eligibility for many government programs, such as Supplemental Security Income (SSI) and Medicaid. Special needs trusts can remove assets from a disabled person’s estate, such as property, workers’ compensation settlements, personal injury awards, or inheritances, allowing the disabled individual to qualify for means-tested benefits like SSI and Medicaid.

Sometimes, a special needs trust can provide a disabled individual with an income stream to help pay for things government benefits do not cover. However, distributions from the trust may count as income and potentially affect a disabled individual’s Medicaid and Supplemental Security Income benefits. Families should consult experienced legal counsel to understand the consequences of a special needs trust on SSI and Medicaid benefits and structure the trust to maximize their disabled loved one’s financial resources and quality of life.

How Can an Arizona Special Needs Trust Attorney Help You?

An Arizona special needs trust attorney can help a family create and manage a trust by:

• Sitting with the family to learn more about their loved one’s situation and discuss their needs, concerns, and goals.
• Evaluating the circumstances to advise the family about the suitability of a special needs trust.
• Structuring trusts to serve the family’s needs and objectives.
• Ensuring that the trust meets legal requirements to secure its benefits.
• Assisting the family with funding the trust, including executing paperwork needed to move assets into the trust.

Contact an Arizona Special Needs Trusts Attorney

Are you interested in protecting your loved one’s needs and giving them a sense of financial security? Contact us today at Mushkatel, Gobbato, & Kile, P.L.L.C. for an initial consultation with an experienced estate planning attorney and learn more about how these powerful legal instruments can serve your family’s interests and goals.

Visit Our Arizona Special Needs Trusts Law Offices