A Special Needs Trust (SNT) is a specific type trust that provides for an individual beneficiary with a disability or special needs, while still allowing that beneficiary to receive important public benefits through Medicaid and Social Security. The beneficiary can maintain eligibility for needs-based government benefits, like Medicaid (AHCCCS and ALTCS) and Supplemental Security Income (SSI) because the beneficiary does not technically own the assets in the trust.
A separate Trustee will manage and control the trust assets. The Trustee will have a legal obligation to make distributions of assets only for the benefit of the beneficiary. Distributions from the Trust should supplement the beneficiary’s public benefits, not replace the benefits. For example, the Trust might pay for dental or medical expenses not covered by Medicare or Medicaid. Or, the Trust might pay for entertainment items, such as passes to the museum and transportation costs. The Trust might pay for housing costs above what is covered by Medicaid. All distributions from the Trust should always be made with Medicaid and Social Security SSI rules in mind.
There are different types of special needs trusts, typically referred to as “first party special needs trust” or “third party special needs trust”. Depending on whose assets are being funded to the Trust (the individual with a disability, or assets of a family member), a specific type of special needs trust will be recommended by your special needs planning attorney.
If you or someone you know is concerned about the preserving public benefits for a loved one in Arizona through the use of a special needs trust, call Bivens & Associates PLLC at (480) 922-1010 or email firstname.lastname@example.org to schedule a consultation.
By Megan Selvey, Attorney at Law