Financial assistance from government programs such as Social Security and Medicaid is an important resource for individuals who are unable to support themselves because of disability or expensive healthcare needs. However, strict eligibility requirements based on income and wealth limitations can quickly prevent access to government assistance despite not having the resources to meet their needs.
A special needs trust in Phoenix is an estate planning tool that can address this problem and help applicants qualify for Medicaid, Social Security, and other state benefit programs. Our reliable trusts attorneys at Dayes Law Firm can help with exactly this concern.
What Is the Purpose of a Special Needs Trust?
Special needs trusts are for people who benefit from government assistance programs because of their health status or limited ability to earn income. The purpose of a special needs trust is to exclude certain assets and income from their net worth when determining eligibility for these government assistance programs.
While a person may maintain eligibility for government assistance with a special needs trust in Phoenix, they may still be responsible for their share of costs when participating in programs like Medicaid. This may apply in cases where the person seeking benefits has significant sources of recurring income.
The value of a special needs trust is often twofold for the applicant. They can benefit from the assets within the trust while still being able to qualify for financial or medical assistance from the government. However, special needs trusts in Phoenix are subject to strict rules and requirements under A.R.S. 36-2934.01 that you must follow to maintain eligibility for Social Security Disability benefits or Medicaid coverage.
How Do Special Needs Trusts Work?
You can create a special needs trust with the help of a Phoenix lawyer from our firm. We help clients prepare the written legal documents necessary to administer the terms of the special needs trust you create. The process begins with a grantor (i.e., the creator of the trust) transferring their assets or future income into the trust. The grantor is typically the person who will be applying to government programs but could also be other household or family members. The transfer process will require the retitling of assets, such as bank or investment accounts, and setting up a separate trust account to receive future assets.
The special needs trust must also appoint a trustee who will be responsible for managing the trust assets, making distributions, and reporting necessary information to government agencies. The trustee cannot be the grantor or their spouse, and is usually another adult relative or close friend. Hiring a professional trustee is another option for special needs trusts in Phoenix.
Special Needs Trusts as Irrevocable
Special needs trusts must typically be irrevocable to separate a person from these assets for government assistance eligibility. The irrevocable nature of the trust removes the grantor from having any control over the trust’s assets and prevents them from being able to unwind its creation. The trust may need to list certain government agencies as remainder beneficiaries after the death of the beneficiary. For example, people who participate in Medicaid through use of a special needs trust will need to pay back actual costs for medical assistance with the remainder of trust assets under A.R.S. 36-2935.
Establish a Special Needs Trust in Phoenix with the Dayes Law Firm
Special needs trusts in Phoenix are complex legal documents that can be a valuable resource if you participate in government programs to supplement income or healthcare costs. The estate planning attorneys at our firm can help you and your loved ones determine the appropriate special needs trust for your situation. Schedule a free consultation with our office today to learn more.
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