3 essential duties of a special needs trustee

| Nov 9, 2020 | Estate Planning |

If you have a disabled loved one, you may want to include a special needs trust in your overall estate plan. This type of trust provides the beneficiary with access to funds to use on supplemental expenses without harming his or her eligibility for means-tested government entitlement programs.

When you form a special needs trust, you designate a trustee to oversee it. You should not take this task lightly. After all, your disabled loved one’s quality of life may be on the line. When selecting your special needs trustee, look for someone who can accomplish the following essential tasks.

1. Accounting and compliance

Your special needs trust must comply with a variety of rules, including its own. Therefore, your special needs trustee should oversee accounting and compliance. This may require preparing periodic reports and filing taxes. The special needs trustee must also be comfortable with basic bookkeeping concepts.

2. Investments

With responsible investing, your special needs trust may grow considerably. This, of course, is a benefit to your disabled loved one. While the trustee may delegate investment responsibilities to a qualified professional, he or she should have enough knowledge to oversee investment activities competently.

3. Disbursements

Making disbursements from the special needs trust is arguably the most important duty the trustee performs. Before doing so, though, the trustee should review rules for the government programs on which your disabled loved one relies.

If a proposed disbursement is likely to harm eligibility for public assistance, the trustee should probably deny it. Likewise, if your loved one is not receiving the care he or she needs to thrive, the trustee may redirect disbursements to address unmet needs.