AZ Special Needs Trusts can be confusing, and the simple fact of the matter is that many parents of disabled children aren’t even aware of the importance of having one. Questions that we often hear can be easily answered, however the overwhelming fear of an unknown future for a special needs child can leave parents breathless. Take a look below at our AZ special needs trust frequently asked questions and answers.

What is an Irrevocable AZ Special Needs Trust?

An Irrevocable Special Needs Trust in Arizona basically means that once you place money into the special needs Trust you can never get it back. That money is there for your special needs child, and no one else. That money can only be used by the sole beneficiary, your son or daughter with the disability, for the sole purpose of non-essential items.

What is a Revocable AZ Special Needs Trust?

A Revocable Special Needs Trust in Arizona is one in which the money can be taken out of at any time, and essentially becomes a part of your estate when you die. With an Irrevocable Special Needs Trust, the money is not taxed as part of your estate when you pass and cannot be sought after by creditors. With a Revocable Special Needs Trust, the money will be counted as part of your total assets, can be sought after by creditors, and can be used for IRS liens.

What is a Pooled AZ Special Needs Trust?

A Pooled Special Needs Trust is established by a non-profit, third party agency that receives and accumulates the funds from individuals through sub-accounts. You often hear about similar types of Pooled Special Needs Trusts on the news after a tragic accident. The third part non-profit will make all decisions based on the trust, take care of all tax preparations, and be completely in charge of that money.

What can AZ Special Needs Trust Fund Money Be Used For?

When it comes to spending the money that you leave for your disabled child in Special Needs Trust, there are rules and regulations that cannot be ignored. Trusts can be used to pay for vacations, summer camps, and entertainment. If your child needs to make accessible changes and upgrades to their home they can use the trust for those accessibility adaptations, however the trust cannot pay for any ‘basic needs’ that Medicare or Medicaid might be paying for. If your child uses the trust money to pay for anything above what Medicaid and Medicare provides, food or clothing. It can be used for alternative or experimental medical treatments, supplements and vitamins, massage therapy, yoga and gym memberships, and sporting equipment.

Who Can Establish an AZ Special Needs Trust?

This will depend on whether you need a First Party Special Needs Trust or a Third Party Special Needs Trust. Speak to me directly regarding which Special Needs Trust is right for you and your family.

With over 25 years of experience in AZ Special Needs Trusts, I can guide you through this confusing and emotional path of Special Needs Living Trusts.

See more AZ Special Needs Trusts FAQ’s here.

 

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