If you have a child with a disability, or who is otherwise unable to take care of themselves, a special needs trust could be a crucial component of their lifelong care. In this post, we discuss how to set up a special needs trust in Arizona, and why you should do so. However, this is not intended to be legal advice. You should always talk to an attorney before drafting any legal documents.
What is the purpose of a special needs trust?
If you care for a family member with special needs, you understand the heightened responsibility you carry for their long-term health and well-being. Ongoing medical care is only one aspect of this. You also want them to live in a safe and accessible environment, have access to health insurance, and afford them as much independence as possible. Ensuring those levels of care beyond your lifetime—and throughout theirs—is likely an area of great concern.
While public benefits are available to certain individuals, the limited government assistance programs in Arizona only go so far. To safeguard your family member’s ongoing quality of life, additional assistance is often necessary. That’s where an Arizona special needs trust comes in.
What can a special needs trust pay for in Arizona?
A special needs trust that has been drafted as part of your estate plan can allow for ongoing public benefits for your family member while also creating a legal option to provide them with supplemental support throughout their lifetime.
Simply gifting a large sum of money to your special-needs dependent could disqualify them from receiving some government benefits. Assets from a properly-drafted special needs trust in Arizona are not considered countable assets when applying for benefits like:
- Supplemental Security Income (SSI)
- Medicaid, or AHCCCS and ALTCS in Arizona
- Vocational rehabilitation
- Subsidized housing
- Other benefits based on need
To remain eligible for these benefits, your special needs trust should not provide specifically for basic food or shelter to the beneficiary; those are provided by state and other benefits, which you are protecting. Your beneficiary will also not be able to take money out of the trust at his or her discretion, like using an ATM card for cash. Instead, an appointed “trustee” manages the special needs trust and must approve all distributions from it.
Although it depends on the provisions included in your trust, generally Arizona special needs trusts can pay for your family member’s:
- Medical expenses, like therapy or dental work, that are not covered by insurance or other benefits
- Home furnishings or maintenance
- School tuition and related expenses, like textbooks
- Clothing or other personal items
- Appropriate entertainment or recreational expenses
- Other expenses that enhance the quality of your loved-one’s life
To ensure your family member remains eligible for government benefits, it’s always important to talk to a special needs attorney before establishing a special needs trust. They are experts at the complex rules governing public assistance and special needs trusts. An attorney can advise you on the best ways to provide ongoing care for your special needs dependent.
How does a special needs trust work?
There are two major types of special needs trusts: self-settled and third-party. At its most basic definition, a self-settled special needs trust is created with the beneficiary’s own assets. A third-party special needs trust, on the other hand, is established by one person for the benefit of another. This type of trust is also called a supplemental care trust and it is the one most commonly created.
In both cases, a trustee, who is someone other than the beneficiary, will be assigned to manage the trust and its distributions. Managing a special needs trust can be difficult and confusing. To help with these challenges, the Special Needs Alliance created the Handbook for Trustees. This is a great starting point for anyone who is managing—or who may manage—a special needs trust.
However, the management of a special needs trust will depend on the provisions in the trust and your state’s guidelines for public assistance. Always work closely with a highly-qualified special needs trust lawyer to draft the right trust for your situation or for help with the ongoing management of it.
How to set up a special needs trust in Arizona
A special needs trust is a powerful document that helps you provide ongoing care for a disabled family member. Special needs trusts are purposely built to be flexible for a variety of cases. But, because of this, they’re rarely simple. The standard, cookie-cutter approach to setting up a trust isn’t enough with these cases.
Before you set up a special needs trust, consider the following questions:
- Do I want my beneficiary to have access to the trust now or upon my death?
- What assets will I use to fund to the trust?
- Who will serve as the trustee?
- Is my family member able to make his or her own personal or financial decisions?
Your answers to these questions will influence what type of trust you create for your loved one.
Next, it’s important to reach out to a special needs attorney to discuss your options. While many estate documents can be created without a specialized attorney, special needs trusts truly do require that you bring in a trusted, highly qualified professional to help. The best special needs trust lawyers will have advanced experience creating special needs trusts. They will also be familiar with Arizona’s public benefits programs.
Find help you can trust
Victoria Ames, Esq., at ARTEMiS Law Firm has advanced experience with special needs cases, due to her own experiences raising children with special needs. She dedicates her time to helping families with special needs children, ensuring that they receive the support they need to navigate these complex decisions.
If you need more help on how to set up a special needs trust in Arizona, or have legal questions about your situation, contact Victoria Ames at ARTEMiS Law Firm today to discuss your options.