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Who should serve as the trustee of a special needs trust?

On Behalf of | Jul 6, 2023 | Estate Planning |

Having a family number with a disabling medical condition can be a challenge. Parents and other family members often have more personal responsibility when a member of the family is incapable of living independently. They may need to continue providing daily care and financial support for someone’s entire life instead of just the first 18 years of their existence.

A Special Needs Trust (SNT) is one of the many tools that families can utilize to provide for and support a loved one with a disabling medical condition. An SNT will provide supplemental financial support for an individual who cannot fully support themselves while ideally not preventing them from benefitting from state benefits.

Of course, a trust is only functional and successful when the trustee managing it does their job well. How can the party creating a trust choose the right trustee to manage the resources in an SNT and their distribution?

Think about ability, personality and age

It takes a lot of careful consideration to choose the right party to administer an SNT. After all, this individual will have a position of authority that will have a profound impact on the future of one of the most vulnerable members of a family. The right trustee is someone who is competent and organized. They need to understand their role and properly manage the assets in the trust. They will also need to be able to handle requests for distributions from the trust and know when it is appropriate to withdraw funds for the beneficiary.

Additionally, the personality of candidates can strongly influence who would be the best choice to fill the role of trustee. Some people become resentful when they have uncompensated obligations placed on them, while others have a history of putting themselves above everyone else. Someone who is prone to starting conflict or laziness may not be the best candidate.

Factors including a history of addiction or a negative relationship with the beneficiary of the trust can also affect whether or not someone is the right candidate. Finally, the age of the trustee is important as well. After all, the beneficiary of the trust will usually outlive their parents or grandparents funding the trust on their behalf. Ensuring that the trustee will survive for long enough to manage all of their responsibilities is important as well.

In scenarios where there is no one ideal candidate, people creating an SNT sometimes name multiple people to serve as co-trustees. Other times, they may choose to hire a professional fiduciary to manage the resources that they set aside for their vulnerable loved one.

The process of selecting a trustee can be very stressful, but it is as important as properly funding an SNT. Careful planning to make a big difference regarding the long-term impact that a Special Needs Trust will have on a dependent family member with a disabling medical condition.