Estate Planning for Families with Minor Children or Loved Ones with Special Needs

When creating an estate plan, one of the most important questions to ask is: “Are my beneficiaries prepared to receive an inheritance?”  If your heirs are minors or have special needs, leaving them assets outright can lead to serious complications — both financially and legally.  Here’s what you need to consider:

Minor Beneficiaries Can’t Legally Inherit Assets

Children under 18 cannot legally control money or property in Arizona.  Without proper planning:

• The court will appoint a conservator to manage the inheritance.
• Once your child turns 18, they receive the full amount — ready or not.

Solution:  Set up a Revocable Living Trust with provisions for minor children.  You choose a trustee to manage the funds until the child reaches an age you believe is appropriate — 25, 30, or even later.

Special Needs Beneficiaries Risk Losing Benefits

If a beneficiary receives government benefits like SSI or Medicaid, an inheritance could:

• Disqualify them from receiving those benefits
• Be required to be spent down before benefits resume

Solution:  Create a Special Needs Trust (SNT).  This type of trust holds assets for your loved one without counting against eligibility, allows them to continue receiving vital public assistance, and can be used to pay for supplemental needs like education, care, recreation, and more.

Choose the Right Trustee

Whether you’re planning for minors or special needs beneficiaries, choosing the right trustee is crucial.  This person will be responsible for managing the inheritance, making distributions, and acting in the best interests of the beneficiary — possibly for many years.

Update Beneficiary Designations

Be sure to update your:

• Life insurance
• Retirement accounts (like IRAs or 401(k)s)
• Payable-on-death bank accounts

Tip: Don’t name a minor or special needs beneficiary directly.  Instead, name the trust you’ve created for their benefit.

Work with an Experienced Estate Planning Attorney

We help families plan for every scenario — including protecting vulnerable beneficiaries.  Whether your loved one is still growing up or living with a disability, we’ll help you build a plan that provides stability, protection, and peace of mind.