From Our “Ask a Question” Mailbag: Choosing a Special Needs Trust Trustee
Most Recently Updated August 9, 2018.
“I am setting up a Special Needs Trust for my son in my Will. I am trying to decide if I should pick my daughter or a bank as the Special Needs Trust Trustee. Who should I pick as the Special Needs Trust Trustee?”
Choosing a Special Needs Trust Trustee
Selecting the right Special Needs Trust Trustee is vital. You have been providing care for your son during your lifetime, and now you are forming a Special Needs Trust for his benefit. The trust itself is only a piece of paper. The Trustee takes your place as the person who uses the funds for your son’s care.
The Special Needs Trust Trustee Has Complex Responsibilities.
A Special Needs Trust, or as it is sometimes called a Supplemental Needs Trust, provides an entity to hold assets for a Special Needs Person. The Trustee is the person or entity who carries out these terms and determines how to distribute trust assets to for the Special Needs person’s benefit. The trustee also invests the trust’s funds and files the trust’s federal and state income tax returns. These are not easy tasks and require experience and unique skills. Be honest with yourself; is your daughter is up to the task? Putting the wrong person in charge can prove disastrous.
Further, the trustee must keep a constant watch on the ever changing rules that govern your son’s government benefits. A mistake could unintentionally disqualify your child from benefits. One last consideration is the strain placed on your son and daughter’s relationship by having her control his funds. Some siblings can handle that stress and others cannot.
Consider Hiring a Corporate Special Needs Trustee And Naming a Family Member as “Protector.”
I like an option that names a corporate trustee as the Special Needs Trust Trustee. A corporate trustee can be a bank or trust company. Some corporate trustees specialize in serving as Special Needs Trust Trustees. I like this option when a family member serving as Protector compliments the corporate trustee. A Protector is a person given the power to remove and replace the trustee without cause. In your case, your daughter could be the Protector. She then verifies trust assets used for your son’s care. Further, she monitors the corporate trustee’s fees.
As Protector your daughter would not be responsible for taxes, investments, nor would she be telling your brother “no” to his requests for funds. Also, as Protector should she determine that the bank or trust company was not providing good service, she could easily fire and replace them. No court or lawyer needed. This way your daughter can look out for her brother, but not have all the Trustee’s responsibility and liability.
More Planning Questions?
Choosing a Special Needs Trust Trustee is only a piece of the Estate Planning process. By all means, if you want to learn more, please read my more detailed article, Estate Planning Everything You Need to Know.
In Conclusion: Choosing a Special Needs Trust Trustee
I hope that this article was helpful in explaining Choosing a Special Needs Trust Trustee. Further, I included links to even more detailed information on my website so you can learn more. Therefore, please contact me and let me know how I did. Certainly, your comments and questions are welcome!
Let our Estate Planning lawyers help walk you through what can be a confusing process. To begin with, call to speak to one of our experienced estate planning lawyers. By all means, our lawyers are ready to answer your questions. In fact, feel free to contact our office for a free consultation. Ultimately our goal is to make the process as painless as possible!
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