What You Should Know About Special Needs Trusts

An Arizona estate planning attorney explains

Estate planning is something that everyone needs to think about. It’s a way to ensure that your assets are used in a way that protects your family. There can be many different parts to an estate plan, depending on your situation. Families with loved ones who are disabled may benefit from a special needs trust.

A special needs trust is a legal arrangement that provides income for a person who has special needs. These include people who are physically or mentally disabled or chronically ill.

How a special needs trust protects beneficiaries

The trust is set up in a way that ensures the person will still be eligible for public assistance disability benefits from Social Security, Supplemental Security Income, Medicare, or Medicaid. These programs have income and asset restrictions. Funds put in the trust do not count toward those restrictions if they aren’t used for food and shelter.

Assets in the special needs trust are often used to pay for medical expenses, caretakers, and transportation costs. Other permitted expenses may include home furnishings, education, recreation, vacation, and physical rehabilitation. The party who sets up the trust will designate a trustee to oversee the management of assets and disbursement of funds.

A special needs trust has many benefits. For example:

• The beneficiary receives financial support without putting their eligibility for public assistance at risk.
• The person that set up the trust has peace of mind in knowing that funds in the trust will only go toward certain expenses for the beneficiary.
• Third parties who put money in a trust will know that their money will be used for its intended purpose.
• The assets of a special needs trust can’t be seized by creditors or as payment in a lawsuit.

Establishing a trust can be complicated and the language needs to be clear. An initial transfer of assets needs to be made and a trustee designated.

These trusts are irrevocable and can only be amended in certain situations, if at all. It’s important to talk to an experienced estate planning attorney to ensure the trust is set up properly.

Helping families plan ahead

The Law Firm of Brown & Jensen helps clients create an estate plan that meets their needs and helps them feel secure about their family’s future. We serve the areas of Mesa, Tucson, Scottsdale, Chandler, Peoria, Goodyear, Payson, and Show Low.

You may not consider yourself wealthy enough to have an “estate.” But everyone has an estate. It simply refers to your assets – everything you own. This includes money, property, and investments.

An estate plan gives you control over how your assets will be used. Without an estate plan, your assets will go through probate after you die. The state will decide how your assets will be distributed and who the beneficiaries should be. There are also attorney fees and court costs when going through probate.

Talk to one of our experienced attorneys. We can help you set up a special needs trust and other documents that meet your family’s needs. Preparing for the future isn’t difficult when you have trusted legal advice. Contact us today to schedule a free consultation.