If you have a friend who has a relative with a disability or other special needs, your friend may have asked you to be a trustee of a special needs trust. Before you agree to do so, though, you should know exactly what the role involves.
A special needs trust is a unique estate planning tool that allows individuals to set aside funds for the benefit of someone else without jeopardizing that person’s eligibility for needs-based government benefits. As a trustee of a special needs trust, you would oversee and manage the trust. We strongly urge that all trustees of special needs trusts engage an attorney to advise them on this highly complex rol
Keeping the beneficiary eligible for government help
Arguably, the most important duty any trustee of a special needs performs is ensuring the beneficiary continues to qualify for government assistance. According to USA.gov, there are many public benefits programs for which a beneficiary may be eligible. This means you must closely scrutinize all disbursement requests to determine whether they are permissible under the rule of the program that gives benefits to the beneficiary.
Complying with investment, reporting, and recordkeeping obligations
Much of being a trustee of a special needs trust involves investing trust assets and ordinary reporting and recordkeeping. As part of these duties, you may have to invest funds as a prudent investor would, maintain trust records, prepare reports, and file taxes. It is important to note, though, that you do not have to necessarily accomplish all these tasks on your own. Indeed, you can outsource the investing to investment advisors and some of the reporting and recordkeeping duties to accountants or other professionals.
Filling gaps in the beneficiary’s care
As a trustee of a special needs trust, you will have intimate knowledge of the beneficiary’s situation. This can lead to some of the more rewarding aspects of being a trustee. Ultimately, if the beneficiary needs something to thrive, you may have to find social service providers, doctors, therapists, or others to fill the gaps.
