Establishing a special needs trust for a child or other loved one with a debilitating medical condition is a clever estate planning move. When properly structured, special needs trusts can provide years of financial augmentation for those incapable of independently supporting themselves.
People can access trust resources for specific expenses while still maintaining their eligibility for crucial state benefits, such as medical coverage or housing benefits. Properly structuring a special needs trust is crucial. So is proper funding. Those establishing a special needs trust also need to consider who might administer the trust.
What characteristics do people need to consider when selecting a trustee?
Proximity and availability
Depending on what assets people use to fund a special needs trust, a trustee may need to occasionally check in on physical assets, such as real estate. They may need to make distributions from the trust on behalf of the beneficiary. As such, choosing someone who is local is usually a smart option. Additionally, the trustee needs to be regularly available to meet with the beneficiary and fulfill the various duties involved in trust administration. Those with large families or demanding careers are not always capable of managing a trust as well.
Ethics and attitude
Another key consideration when selecting a trustee to administer a special needs trust is the ability to act in the best interests of the beneficiary. Some people might abuse a position of authority for personal gain. They might embezzle or might even financially abuse the beneficiary who depends on them for support. Thinking about how people have acted during times of hardship can be helpful. So can reviewing the way that they treat others with whom they do not have particularly positive relationships. Their prior conduct can provide insight into how they may behave during times of stress and whether they might misbehave in the future if they come to resent their obligations as trustee.
The relationship they have with the beneficiary
Sometimes, parents choose the adult siblings of a child with special needs to act as the trustee. Other times, they may turn to cousins or even long-term family friends. Selecting someone who has a positive attitude toward and a healthy relationship with the beneficiary is usually the best approach. Those who care about the beneficiary may have internal motivation to do their best in their role as a trustee.
Some people choose to use professional fiduciaries if they do not have family members capable of administering a trust. Others may name two or more people as co-trustees to provide oversight and to augment the shortcomings of any one particular trustee candidate.
Naming the right trustee is an important part of establishing a special needs trust. People may need help creating a short list of candidates and integrating the right information into their trust documents to protect a vulnerable loved one, and that’s okay.
