The Need for a Special-Needs Trust in Arizona

A Special-Needs Trust can be a trust that is established to benefit a beneficiary with disabilities who is eligible for governmental assistance. The special needs belief in Arizonas purpose is to provide support for the beneficiary beyond the Federal-aid "faucet". It is important to correctly draft this type of trust. Errors can lead to the loss of government assistance and trust income.

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In Arizona, the trustee should have complete discretion over the payment of principal and income. Beneficiaries should not be allowed to act as trustees. Cash payments should not be made directly to beneficiaries. The trust should only pay for items the beneficiary needs. This is crucial because any money that the beneficiary receives could reduce their Supplemental Security income or even result in a complete loss of Medicaid benefits.

To clarify that the trustee will only expend income or principal after receiving Federal, State, and Local public assistance, it is necessary to insert protective language in the trust. The principal and income should be used only for the benefit of the beneficiary. To avoid the government attaching trust property for reimbursement of public assistance payments, a spendthrift clause should be added to the trust.

In Arizona, it is difficult to find an attorney who can draft a Special Needs Trust. A Special-Needs Trust is a complex area of law and you need someone who has experience in this field. You want someone you trust and feel at ease with. The Special-Needs Trust is intended to last the life of the beneficiary. Your attorney will also be an important part of your financial team.

Flora Wilson