Special Needs Planning Law Attorney in Scottsdale, AZ

When a person is receiving government assistance that is based on the individual’s income and/or assets, special care needs to be taken when planning for that individual.

The most common estate planning tool so that a person with special needs can inherit assets, is a special needs trust. We often call these “third party special needs trusts” or “non grantor special needs trusts.” All of the money that is deposited to this kind of trust must be money that was never the money of the special needs beneficiary. For example, you would never deposit the social security payment received by the special needs beneficiary into this kind of trust.

These trusts can be a drafted as a separate trust (our preference), as part of an existing family trust, or as part of a Last Will & Testament.

The trust leaves all of the decision making about spending money on the special needs beneficiary in the discretion and judgement of the Trustee. Once any assets or money are titled to this trust, if the special needs beneficiary is receiving benefits from ALTCS, the trust document must be provided to ALTCS. If the special needs beneficiary is receiving Supplemental Security Income (“SSI”), the trust must be provided to the Social Security Administration. A properly drafted trust should not have any impact on these benefits so long as the Trustee has administered the trust in accordance with the rules. Upon the death of the beneficiary, the trust can name the remainder beneficiaries.

There are also “first party special needs trusts.” These trusts are needed when the beneficiary is receiving ALTCS/DDD or SSI benefits and the beneficiary is directly entitled to money or property. For example, if a person dies and leave money outright to the beneficiary, the funds may need to go to a first party special needs trust. A common use for a first party special needs trust is where a person is injured and receives ALTCS benefits and then receives a settlement or jury award to compensate the person for their injuries.

In Arizona, there are additional forms, reporting requirements and limits on how funds can be used for these kinds of trusts where the beneficiary receives services from ALTCS. At the death of the beneficiary, the States who provided Medicaid/ALTCS services will be paid back before any other beneficiaries will be entitled to any funds in the trust.

CLICK HERE to download our questionnaire regarding special needs trusts

There are also “pooled special needs trusts.” These trusts are managed by non profit organizations.  They can be third party or first party trusts, as described above.

Other things to think about:

ABLE accounts. 

SSI benefits. This is a cash payment from the Social Security Administration for a disabled person who does not have a work history, has assets of less than $2,000 and has low or no other income. 

Guardianship - the court process of appointing someone to make health, housing, and education decisions for an incapacitated person.

Conservatorship - the court process of appointing someone to manage money for an incapacitated person.

Special Needs Trust - a trust to hold assets for the benefit of a disabled person without negatively impacting SSI and ALTCS benefits.

ALTCS - The Arizona State Medicaid program to help offset the cost of caregivers, group homes, assisted living centers, and related services.

ABLE Accounts - a place to accumulate or gift money to a person who was disabled prior to age 26 without negatively impacting SSI and ALTCS benefits.

SSI - Supplemental Security Income, for low income, low asset, disabled individuals.

SSDI - Social Security Disability Income for low income individuals who have worked sufficient quarters to qualify for SSDI which pays more than SSI.

Medicare - to cover medical expenses. Someone who has been on SSDI for at least 24 months will then be eligible to receive Medicare benefits, regardless of age.

What resources are available to find answers?

How does decision-making authority change when a child reaches age 18?

Will an UTMA (Uniform Transfer to Minor Account) or 529 Plan impact SSI or ALTCS eligibility?

What other legal issues do I need to think about?

Our firm can assist you in finding the right resources. We are here to draft documents that are needed to ensure that the right person is making the right decisions. You understand your loved and we understand the legal system and the benefit programs that might be available.