Special Needs Trust Planning for Arizona Families

Planning for a loved one with special needs can create unique challenges for families in Arizona. A special needs trust (SNT) can provide long-term financial security and protect your loved one’s access to essential government benefits. Working with an estate planning attorney can help your family structure an SNT in Arizona that conforms to state law.

Why Special Needs Trusts Matter

Families who care for individuals with special needs often face significant financial and legal challenges in balancing their daily expenses with long-term planning concerns. Even well-intentioned gifts or inheritances can jeopardize critical support by compromising a loved one’s eligibility for government benefits through the Arizona Health Care Cost Containment System (Medicaid) or Supplemental Security Income (SSI).

An Arizona special needs trust is a legal arrangement that can help protect your loved one’s assets, safeguard their eligibility for benefits, and establish a structured plan for their future care. This protection offers families the peace of mind that comes with knowing their loved one’s needs can be responsibly met once they are gone.

Types of Special Needs Trusts in Arizona

The right type of special needs trust depends on a person’s circumstances.

• First-party special needs trust – Holds assets that belong to the individual, such as an inheritance or personal injury settlement, and must include a Medicaid payback provision upon the individual’s death
• Third-party special needs trust – Funded by parents, relatives, or others and does not require Medicaid reimbursement
• Pooled trust – Managed by a nonprofit and combines assets from multiple beneficiaries, maintaining separate oversight for each participant, with the remainder paid back to Medicaid after the beneficiary’s death

An Arizona special needs trust lawyer can sit down with your family to determine which option would best meet your loved one’s needs.

Key Components of a Special Needs Trust

You can tailor your SNT to fit your family member’s personal situation while keeping Arizona and federal requirements in mind. Some core aspects will shape how the trust operates and retain your loved one’s eligibility for means-tested government benefits.

A special needs trust should clearly explain:

• Who’s in charge – Name of the trustee who will manage the trust and handle distributions
• What’s included – Which assets fund the trust, like savings, property, or life insurance
• How money can be used – Instructions for spending that enhance your loved one’s quality of life
• Keeping benefits safe – Following rules to avoid compromising eligibility for public benefits programs

Common Mistakes to Avoid

It’s easy to make errors when setting up a special needs trust without professional guidance. Common missteps include:

• Naming the individual with special needs — rather than the trust itself — as the direct beneficiary of life insurance or retirement accounts
• Providing vague distribution instructions
• Selecting an unprepared trustee
• Failing to include proper Medicaid payback provisions when required

An experienced special needs trust attorney can carefully draft the trust documents to safeguard both the trust’s purpose and your loved one’s long-term stability.

How an Arizona Special Needs Trust Lawyer Can Help

When your family is planning how to provide financial support for a disabled loved one, partnering with an experienced estate planning law firm can make a significant difference. Brown & Hobkirk, PLLC has served clients throughout Arizona for over 20 years. Our legal team can meet with you to discuss your needs and concerns and draft the necessary paperwork in compliance with all applicable laws.

Contact us today for a free initial consultation and learn more about what we can do for your family.