What is a special needs trust?

A special needs trust is a type of trust often used in Arizona to provide financial support for a person with special needs. The trust is made up of assets from a legal guardian or other person set up to supplement existing benefits for the special needs individual. A special needs trust allows for assets to remain separate from other assets held by the individual, thereby ensuring that the purpose of the trust is fulfilled. Benefits from the trust can be used to pay for items that may not be covered by the individual’s normal benefits, such as medical expenses, prescription drugs, transportation, recreation, or supplies that they may need to function better in day-to-day life. The trust also provides protection for the individual so that their only source of income is not disrupted if they receive Social Security or other benefits. Unlike other trusts, a special needs trust might not be payable to its beneficiary and instead be payable to a third party on their behalf. This is to ensure that the beneficiary does not lose any benefits they currently receive and also keeps their eligibility for public benefits intact. In Arizona, special needs trusts can be set up either by statutory law or through private contractual agreement. These trusts can provide financial and emotional support for those who are unable to provide for themselves due to their special needs.

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