A special needs trust is established to prevent people from losing benefits from certain government programs after receiving a settlement. An influx of wealth can make one ineligible for benefits from Supplementary Security Income (SSI), Veterans Aid and Attendance, Medicaid, and government housing. A special needs trust supplements but does not replace, these benefits by paying for non-covered services or equipment. Below are the applicable laws to establishing a special needs trust in Arkansas.
Federal Law
U.S. Code Section 1396p.(d)(4)(A)
(4) This subsection shall not apply to any of the following trusts: (A) A trust containing the assets of an individual under age 65 who is disabled (as defined in section 1382c(a)(3) of this title) and which is established for the benefit of such individual by the individual, a parent, grandparent, legal guardian of the individual, or a court if the State will receive all amounts remaining in the trust upon the death of such individual up to an amount equal to the total medical assistance paid on behalf of the individual under a State plan under this subchapter. Full text
Arkansas Law
In Arkansas, a special needs trust can either provide general support or supplemental care. A special needs trust to provide supplemental care is the more common of the two options. It is meant to act as a secondary source of benefits for the disabled individual after government benefits have been exhausted. On the other hand, a trust for general support acts as the sole or primary source of benefits. The property included in a general support special needs trust could preclude needs-based government benefits.
