Trusts for Disabled Beneficiaries
A special needs trust is designed for beneficiaries with special needs. Today, parents with a special needs child can set funds aside in a supplemental needs trust without disqualifying their child from much needed government benefits such as SSI or Medicaid. A special needs trust comes in the form of a third party supplemental needs trust or a supplemental needs payback trust.
With a third party supplemental needs trust; it is created and funded during the life or at death of the child’s parents or a third party. Assets contained within the trust are to be used to improve the child’s quality of life by providing products or services that aren’t ordinarily covered by government benefits. What’s more, upon the special needs child’s death, the government does not receive reimbursement from the trust and the remaining assets are passed on to other beneficiaries who were designated by the trust’s creator.
The other option is the supplemental needs payback trust which preserves public benefits in instances where the special needs child acquires assets in his or her own name. A payback trust can be created by a legal guardian, the court, and the child’s parents or by their grandparents. The child’s assets can be transferred to the payback trust without being penalized for the purposes of SSI or Medicaid. Similar to the third party supplemental trust, the payback trust can be used to enhance the child’s quality of life by providing goods or services not covered by government benefits; however, unlike the third party trust, if the child dies, then trust assets are used to reimburse benefits provided by Medicaid during the child’s life.
Trusts, Providing a Better Quality of Life
Even special needs children who don’t have assets in the present still may get a job or otherwise acquire assets in the future. Due to the changing trends in medical technology, and the unpredictability of the future, it’s often appropriate for parents of special needs children to create a third party supplemental needs trust and a payback trust.
Searching for a lawyer to establish a special needs trust in Arizona? With more than 20 years of experience, the Arizona estate planning attorneys at Ferris, Thompson & Zweig can assist you with a host of vital and interrelated issues that may affect your child’s future. With proper planning, you can establish special needs trusts that provide your child with a higher quality of life without endangering their eligibility for government assistance. We urge you to contact our office today at (480) 543-8700 for further assistance.