What is a Fiduciary?

Fiduciary is an individual who looks after the affairs of another. Arizona Professional Fiduciaries are licensed by the Arizona Supreme Court and goverened by the Code of Conduct which states:

The fiduciary shall exercise extreme care and diligence when making decisions on behalf of a ward or protected person. The fiduciary shall make all decisions in a manner that promotes the civil rights and liberties of the ward or protected person and maximizes independence and self-reliance.

Who needs a Guardian?

Guardianship is a legal procedure in which a person (or persons) is appointed by a court to make decisions for someone who no longer can make those decisions.

Why would we want a Personal Representative?

A Personal Representative is responsible for collecting the assets of the estate, protecting the estate property, preparing an inventory of the property, paying valid claims (including debts and taxes) against the estate, representing the estate in claims against others and distributing the estate.

What does a Conservator do?

If a court appoints someone to take care of financial matters, that person is usually called a "conservator of the estate," while a person in charge of medical and personal decisions is a "conservator of the person." An incapacitated person may need just one type of representative, or both.

What is a Power of Attorney and why do I need it?

A power of attorney (POA) is a document that allows you to appoint a person or organization to manage your affairs if you become unable to do so. However, all POAs are not created equal. Each type gives your attorney-in-fact (the person who will be making decisions on your behalf) a different level of control.

What is a "Self-Settled" Special Needs Trust?

A self-settled Special Needs Trust is one that is established with the beneficiary’s own assets. This type of trust is most commonly used in situations where a recipient of public benefits receives a personal injury settlement or inheritance that would otherwise disqualify from benefits.

While receiving a large sum of money would ordinarily disqualify an ALTCS or SSI recipient from eligibility, Special Needs Trusts assist recipients in keeping the settlement or inheritance, and still remain eligible for benefits.

Most times, this person must be a court-appointed guardian, although the beneficiary’s parent or grandparent may also establish the trust in certain situations. Also, self-settled Special Needs Trusts must generally include what is called a payback provision, which repays state agencies for benefits upon the beneficiary’s death.

What is a "Third Party" Special Needs Trust?

Third-party Special Needs Trusts are different from self-settled trusts in that one person establishes them for the benefit of another. Parents of disabled children establish third-party Special Needs Trusts, thereby helping the child obtain public benefits while at the same time providing additional support for the disabled child.

The trust document must grant the trustee discretion whether to distribute funds to the beneficiary. If drafted in this manner, the trust may supplement the child's benefits without jeopardizing eligibility.

Unlike self-settled Special Needs Trusts, third-party Special Needs Trusts do not require payback provisions. Furthermore, they can ordinarily be established without the direction of a judge or a court-appointed guardian.

How are Special Needs Trusts Used?

Special Needs Trusts are ordinarily used to supplement the assistance provided by Medicaid (AHCCCS and ALTCS) or SSI. Once placed in a special needs trust, funds are set aside for certain uses, and they are not counted for public benefit eligibility purposes.

But, because Special Needs Trust funds can only be used for approved expenses, an inappropriate expenditure may cause the beneficiary to be denied or disqualified from public benefits.

Trustees are bound by fiduciary duties and must be attentive to detail when administering a Special Needs Trust. They must comply with the language of the trust document itself, as well as with Arizona trust laws.

In fulfilling their obligations, trustees are required to handle tax issues and necessary accountings. Since Special Needs Trusts are generally used to help the beneficiary remain eligible for public benefits, trustees should also be familiar with the rules and regulations surrounding ALTCS and SSI.