Special Needs Trust Attorney in Phoenix, AZ

No law requires an attorney, but a special needs trust is one of the riskiest documents to draft from a form. A single clause that lets the trustee pay for basic support, or that gives the beneficiary any control, can make the trust a countable resource and end SSI or AHCCCS coverage. First-party trusts also have to pass an AHCCCS review, and a trust missing required terms must be amended before it qualifies. Online forms rarely address Arizona's rules or tie the trust to the rest of your estate plan. An attorney drafts the trust so it works the first time.

The difference is whose money goes in. A first-party trust holds the disabled person's own assets, such as a personal injury settlement, back benefits, or an inheritance received outright. It must be set up before age 65, and AHCCCS is repaid from what's left when the beneficiary dies. A third-party trust holds money from parents, grandparents, or others. It has no payback requirement, so the remainder can pass to siblings or other heirs. Families usually want both kept separate, because mixing the beneficiary's own money into a family trust can trigger payback on the whole trust.

A special needs trust can pay for the extras that improve your loved one's life: therapies, medical and dental costs benefits don't cover, equipment, a phone or computer, education, travel, recreation, and personal care. The trustee pays the provider directly instead of handing cash to the beneficiary, since cash counts as income for SSI. Paying for rent, a mortgage, or utilities is allowed, but it counts as in-kind support and can reduce the monthly SSI check. Since September 30, 2024, food no longer counts. A good trustee weighs each payment against its effect on benefits.

Anyone with a disability who receives, or may later need, means-tested benefits such as SSI, AHCCCS, or ALTCS can benefit from a special needs trust. Arizona's trust code defines a special needs trust as one created for a person with a disability under the Social Security definition, with a purpose of keeping that person eligible for public, charitable, or private benefits. The beneficiary doesn't need to be on benefits today. Many parents create a third-party trust for a young child years before any application. A first-party trust has extra limits, including the under-65 age rule.

Yes. A special needs trust can buy or hold a home for your loved one to live in, and the home itself isn't a countable resource for SSI while the trust owns it. The tradeoff is ongoing costs. When the trust pays the mortgage, property taxes, or utilities, SSI treats those payments as in-kind support and may reduce the monthly check. Many trustees accept that reduction because stable housing is worth more than the lost benefit. In Arizona, real estate moves into the trust by a deed recorded with the county recorder, such as the Maricopa County Recorder's Office.

A first-party special needs trust must be irrevocable. A third-party trust is usually irrevocable once it's funded, but it often starts inside a parent's revocable living trust, which the parent can change during life. At the parent's death, that share becomes an irrevocable special needs trust for the child. This lets you plan now and update the terms as your family changes. A stand-alone third-party trust can also be set up during your life, so grandparents and other relatives can name it in their own estate plans and on beneficiary forms.

Many families use both. An ABLE account lets the person with a disability save up to $20,000 a year in 2026, and the first $100,000 doesn't count against SSI's $2,000 resource limit. Since January 1, 2026, the disability must have begun before age 46, up from 26. ABLE accounts are simple and let the beneficiary pay for housing without the in-kind support cut. They also carry payback to Medicaid at death and annual limits that rule them out for a large inheritance or settlement. A special needs trust handles larger sums, and a trustee can fund the ABLE account from the trust.

That turns on the trust type. With a third-party trust, the remainder passes to the people you name, such as siblings or a charity, with no repayment to AHCCCS. With a first-party trust, AHCCCS must be repaid for benefits it provided before anyone else receives the remainder. The trustee pays final expenses allowed by the trust and AHCCCS rules, then sends the payback and distributes what's left. The firm does not handle trust administration after a death, but Francisca's drafting gives your trustee clear instructions for that day.

The main tradeoffs are control and paperwork. The beneficiary can't take money out or direct spending, and the trustee must keep records, file trust tax returns, and report to SSA or AHCCCS when required. First-party trusts carry AHCCCS payback and its review. Trust payments for housing can reduce SSI. For many families, those costs are small next to losing benefits that cover medical care and long-term support. Francisca explains each tradeoff so you can choose the trust, an ABLE account, or both with your eyes open.