Families with special needs children often work with us to establish special needs trusts. A special needs believe in Arizona allows you to leave assets that can be used to care for a child with special needs without compromising their entitlement to government benefits. Government benefits can be vital for someone with special needs.
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In Arizona, Medicaid is the most common type of insurance that special needs children can receive. If you leave an inheritance to a recipient of special needs benefits, your child will lose all their benefits. This is the problem with planning for a special needs child. They will have to spend down the assets until they can re-qualify as Medicaid recipients.
One option is to give the assets to siblings, with the understanding that they will care for their special needs sibling. This assumes the sibling does not lose the money to a creditor or in a divorce and that they can care for their special needs sibling for the rest. This is not a good solution. This assumes that the financial crisis will never occur for the non-special needs sibling and places an unfair burden upon the siblings.
A special needs trust is the second option. A third-party, stand-alone special needs trust can be created to allow you to leave assets that aren't countable assets for Medicaid and SSI purposes. These assets can be used for filling gaps in government benefits programs.
They also provide a safety net that will ensure that your special needs child has the support they need. In Arizona, a properly drafted trust, with care manager provisions and professional trustee provisions, can ensure that your special needs child does not get abused or taken advantage of even if government benefits are not an issue.