Choosing the Trustee for Your Special Needs Trust

If you want to ensure that the needs of your loved one(s) with disabilities are provided for, you should consider establishing a special needs trust. The following provides some information about special needs trusts and the importance of choosing a proper trustee–

What Is a Special Needs Trust?

A special needs trust is a type of trust that is set up for a loved one with a disability, and is designed to ensure that the disabled person does not lose government benefits – (like Supplemental Security Income or Medicaid) – as the result of assets placed in the trust. By establishing a special needs trust, monies in the trust are distributed to the trustee, rather than your disabled loved one, for the purpose of providing for your loved one’s needs. Because assets are not distributed directly to the disabled loved one (a/k/a beneficiary), eligibility for government programs is not lost.

What Does a Trustee Do?

The trustee for a special needs trust is responsible for managing all financial aspects related to the trust and its beneficiary. This includes, but is not necessarily limited to:

  • – Investing trust funds;
  • – Using trust funds to purchase goods for the beneficiary;
  • – Acting as the fiduciary in the beneficiary’s best interests;
  • – Filing taxes;
  • – Maintaining awareness of all government benefit laws and changes to law; and
  • – Keeping financial records.

A trustee may also be responsible for securing healthcare for the beneficiary, finding housing, purchasing food, etc. depending upon the situation.

Characteristics to Look for In Your Special Needs Trustee

Because a trustee has a huge responsibility to your loved one and your family, it is important that you choose a trustee that you can count on and feel comfortable entrusting your money, and the care of your loved to. A person who has the ability to understand government benefit laws, and who is willing to prioritize the best interests of your loved one, is ideal. Some things to look for in your special needs trustee include:

Knowledge of the beneficiary’s needs. It is important that the trustee you assign to your loved one’s trust understands the beneficiary’s needs and is familiar with their medical history. The trustee will be tasked with providing for the person, whose needs may depend on the extent of the loved one’s disability.

Something to think about is the age of your trustee. While you may be more comfortable trusting someone who is older than your loved one with your loved one’s needs, keep in mind that a significant difference in age could mean that the trustee dies before the beneficiary. For this reason it is always recommended that you appoint a successor trustee, or give the trustee the power to appoint a successor.

Ability to act on the beneficiary’s behalf. A trustee who has a conflict of interest may be unable or unwilling to act on the beneficiary’s behalf, or may be tempted not to. For example, if you appoint a trustee who will inherit any assets left in the trust at the time of the beneficiary’s death, then the trustee may be tempted to maximize those assets by not spending them for the beneficiary’s needs.

General competence. General competence isn’t easy to define, but basically, the trustee that you choose should posses the ability to think critically and comprehend financial matters. A person who can barely balance their own checkbook is not ideal.

Contact Patricia Bloom-McDonald, Attorney at Law, Today

For help establishing a special needs trust or choosing a trustee to manage your trust, Patricia Bloom-McDonald is here for you. Patricia is committed to prioritizing your needs, and has the legal experience to competently assist you. Contact her today at 508-646-9888.