Assigning a Trustee to a Special Needs Trust
If you are interested in creating a Special Needs Trust (SNT), one of the first decisions you will need to make is who to designate as the trustee. The rules do not allow for the trustee to be the beneficiary (the individual with a disability) or their spouse. If the beneficiary of a special needs trust or their spouse is the designated trustee, the funds held in the trust would automatically be considered a resource, or asset of the beneficiary under Supplemental Security Income (SSI) and Medicaid rules. Since trust assets would then be regarded as countable assets, the beneficiary would likely be counted ineligible for needed services and benefits. Since maintaining eligibility for benefits is one of the primary purposes of a Special Needs Trust, the beneficiary is never also the trustee. For the same reason, the trustee should not be any individual who is on SSI or Medicaid.
Common Choices for Special Needs Trust Trustee:
- Professional Fiduciary
- Qualified and Available Family Member
No matter who is appointed as trustee for the special needs, they must have some vital characteristics.
Every SNT Trustee Should:
- Have Common Sense
- Have Good Business Sense
- Be Honest
- Be Organized
- Know When to Ask for Assistance from a Financial Planner
- Know When to Ask for Assistance from a Certified Public Accountant
- Know When to Ask for Assistance from an Estate Planning Attorney
- Be Physically and Mentally Capable of Handling Legal, Tax, Investment, Accounting and Interpersonal Issues Arising from Trust Administration
- Have Time to Manage the Tasks Associated with the Trust
- Understand the Beneficiary’s Special Needs
- Understand the Public Benefits Programs the Beneficiary Utilizes
- Understand the Effect of Distributions on Public Benefits Program Eligibility for the Beneficiary
If you are interested in setting up a special needs trust or you need assistance designating a qualified trustee for your special needs trust, please get in touch with an experienced estate planning attorney at Elder Solutions Law Firm today so we can help you.