Choosing a Trustee for a Special Needs Trust

Appointing a Trustee

When you first create a special needs trust, it’s common for you to name yourself as the trustee. However, it’s important to plan for the care of your loved one when you’re no longer around.

Naming a successor trustee ensures that the trust will be in good hands when you’re no longer able to manage it. However, choosing a trustee for a special needs trust can be a challenging task that requires careful planning.

Who Can Be a Trustee of a Special Needs Trust

Although it’s common to name a family member or close friend as the trustee of a special needs trust, they aren’t the only options. Appointing a trustee without professional guidance can be a lot of work. Sometimes, family members may not have the time or understanding to be a fitting trustee.

If no family member is willing or able to serve as a trustee, it often makes sense to rely on financial institutions or non-profit organizations for trust administration.

It’s also common to name multiple people as co-trustees. Doing so allows you to pair an individual close to the beneficiary and a professional trustee with more experience managing trusts. This can relieve each trustee of some of the responsibility, ultimately ensuring that the beneficiary’s needs are met.

Alternatively, you might name a married couple related to the beneficiary as co-trustees. If something were to happen to either of the co-trustees, the other would still be able to manage the trust without further complications.

Special Needs Trust Trustee Responsibilities

The primary responsibility of a trustee is to look out for the financial well-being of the trust’s beneficiary. Trustees must understand all the public benefit programs that the beneficiary qualifies for. They are also responsible for ensuring that the beneficiary maintains eligibility for all the programs they’re enrolled in.

Trustees handle investments of the trust assets, tax reporting, tax returns, and all of the trust’s accounting and bookkeeping. To do so, they must consider what the beneficiary needs as well as what they may need in the future.

Determining these needs will require contact with family members, caregivers, government benefits programs, and other important people and organizations in the beneficiary’s life.

It’s important that potential trustees entirely understand and accept the responsibilities of the role. It’s also important to avoid conflicts of interest when possible. Often, trustees are named as the remainder beneficiaries, meaning they’ll inherit remaining assets when the trust ends. Doing so gives the trustee a financial incentive to limit the use of the trust’s funds and should therefore be avoided when possible.

Making a Decision

Choosing the right trustee for a special needs trust provides you and your family with peace of mind that’s invaluable. You should discuss the matter in detail with any individuals, financial institutions, or non-profits you’re considering for the job.

Setting up a pooled trust to be managed by a non-profit is often a wise decision. Doing so ensures that the trust is managed by experienced professionals and allows the trust to take advantage of growth opportunities that would otherwise not be available.

Contact Us Today

If you’re considering setting up a special needs trust in Chicago or the surrounding areas, Life’s Plan can help. Give us a call at 630-628-7189 to speak with an experienced professional who can guide you through the process.

We know how difficult these decisions can be. We will do everything we can to help you understand your options so you can provide your loved ones with the care they deserve. Don’t wait to get the guidance you deserve. For information and support for making special needs trust funds in Dupage County and surrounding areas, contact our friendly staff today.