About Special Needs Trusts

A special needs trust is specifically designed to protect a disabled beneficiary's eligibility for income and/or resource-sensitive public benefits programs. There are two basic types of special needs trusts (SNTs):

  1. Third-Party SNTs, also discussed under "Estate Planning", are trusts established and funded by someone other than the disabled beneficiary. These are an important part of the Estate Planning documents of anyone who is considering leaving funds to a person of any age who is eligible for public benefits.
  2. Self-Settled SNTs are trusts established for the benefit of a beneficiary with the beneficiary's own funds, most often received by inheritance or settlement. Only persons who have not yet reached the age of 65 may establish and fund a Self-Settled SNT, although they can continue operating for the benefit of the beneficiary long after the beneficiary turns 65. These have "payback" provisions naming the State as the beneficiary of the Trust upon the beneficiary's death, giving the State the right to recoup the State's costs of providing coverage to the beneficiary during his or her lifetime. They will often require the involvement of the probate court.

Catherine LeasThird-Party SNTs And Estate Planning

Because Self-Settled SNTs often involve the court, have payback provisions, are generally more restrictive, and cannot be established or funded by beneficiaries who have already reached the age of 65, it is always better to incorporate third-party SNTs into your estate planning when leaving inheritances to disabled beneficiaries who are eligible for public benefits rather than leaving the inheritance to the beneficiary outright.

The Law Office of Catherine Leas, P.C., in Sun City advises and assists clients for whom SNTs are appropriate. We can evaluate eligibility and educate you on the strict requirements that go along with SNTs, including allowable distributions. We can help ensure that the trustee follows the guidelines for administering these types of trusts.

Catherine Leas devotes a significant amount of time each year to keeping up with the educational requirements that are necessary for this practice area. Her membership in the Special Needs Alliance and her certifications as an elder law attorney by the National Elder Law Foundation and as an estates and trusts attorney by the State Bar of Arizona will reassure clients that they are making a wise choice.

Schedule an initial consultation with lawyer Catherine Leas to discuss the nuts and bolts of a special needs trust for yourself, a family member or someone for whom you have been appointed a guardian or conservator. Call 602-842-6903 or email us.