Special Needs Trust - Kierman Law

Providing for Your Loved One’s Future with a Special Needs Trust

If you currently provide care for a child or loved one with special needs (such as mental or physical disabilities), you must have contemplated with concern about what may happen to them when you are no longer able to provide and care for them. Caring for a loved one with special needs means planning for their long-term financial security while ensuring they remain eligible for essential government benefits. You want to provide for them, but you’re concerned about how an inheritance or financial gift could affect their access to Supplemental Security Income (SSI), Medicaid, and other vital programs. For those with a disabled family member, lack of planning for even small estates can have a devastating effect, resulting in the loss of government benefits.

A person with a disability may not be able to work so he or she may need financial and other assistance from a variety of government resources. However, many government programs will not assist people who have assets.

Many parents or other family members have the best of intentions when leaving a special-needs child or another loved one an inheritance or other funds. But often, due to incorrect planning, their loved one becomes ineligible for other benefits or loses a significant portion of his or her funds in the process. Failure to plan correctly for a loved one with special needs can have significant negative and unintended consequences.

To avoid this dilemma, it is important to include provisions in your estate plan that will enable a loved one with a disability to maintain eligibility for means-tested government benefits without having to forgo his or her inheritance. In addition, it is important to review common savings vehicles for children, like custodial accounts or traditional irrevocable trusts, that will cause a reduction or elimination of public benefits for a child with a disability when he or she reaches adulthood.

The most common document created to protect a disabled child’s benefits is a special needs trust. The government has established rules allowing assets to be held in trust, called a “Special Needs” or “Supplemental Needs” Trust for a recipient of SSI and Medicaid, as long as certain requirements are met. Depending on your needs, this trust can then be used to pay for activities, amenities, home care or even a home. With proper planning, your disabled family member can fully utilize the public resources available to them and maintain a quality standard of living once you are no longer able to care for them.

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Financial Gifts Can Disrupt Benefits

Without a Special Needs Trust (SNT) in place, assets left directly to a person with disabilities can jeopardize their eligibility for critical public assistance programs. This can lead to:

Loss of Medicaid coverage
Disqualification from Supplemental Security Income (SSI)
Financial vulnerability due to improper fund management
Legal challenges and unintended tax consequences

How a Special Needs Trust Works

A Special Needs Trust is a legal arrangement designed to hold assets for the benefit of a person with disabilities. These assets can be used to cover expenses beyond government-provided assistance, such as:

Housing and living arrangements
Education and training
Medical and dental care not covered by Medicaid
Transportation and recreational activities
Personal care and quality-of-life enhancementsLoss of Medicaid coverage

Give Your Loved One a Secure Future

A Special Needs Trust allows you to provide for your loved one without risking their eligibility for essential benefits. The right legal plan ensures their care and quality of life for years to come. Kierman Law, can help you set up a Special Needs Trust in Arizona so that government benefit eligibility is preserved while at the same time providing assets that will meet the supplemental needs of your loved ones.

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