Estate Planning Attorney in Phoenix, Arizona
What is a special needs trust and when are they used?
What is a special needs trust and when are they used?
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So special needs planning is probably one of the most misunderstood areas that we practice in. You need a special needs trust if you have a child or a beneficiary that has a diagnosis and is receiving government benefits and you want to be sure that if they receive an inheritance that the inheritance doesn’t disqualify them from some mean testing benefits because if they lose those benefits then they may lose other benefits. So we have to be very careful in planning that if there’s a child involved that’s on the spectrum or has a diagnosis and is receiving government benefits or may receive government benefits in the future then we need to add in some language into our trust so that when that person actually inherits that there’s limitations on how the trustee can use the money for that child’s benefit.
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Phoenix, AZ estate planning attorney Mark A. Bregman talks about what a special needs trust is. He emphasizes that special needs planning is one of the most commonly misunderstood areas of his practice. A special needs trust becomes essential when a child or beneficiary has a diagnosis, is receiving government benefits, and may risk disqualification from those benefits if they inherit assets directly. Because the loss of one means-tested benefit often results in the loss of others, careful planning is required to preserve eligibility.
When a beneficiary is on the spectrum, has another diagnosed condition, or is likely to rely on government assistance in the future, it is critical to include specific provisions within the trust. These provisions limit how trustees may use the inherited funds, ensuring that the assets support the beneficiary without jeopardizing access to vital government programs.
