The trustee of a Special Needs Trust occupies an extremely important role. He or she is in charge of all the ordinary duties carried out by any other trustee, including:
- Managing and investing the trust assets on behalf of the beneficiaries of the trust;
- Keeping the books and records for the trust;
- Reporting to the IRS as appropriate; and
- Maintaining communication with the beneficiaries of the trust and distributing the trust income and/or principal for their benefit.
But, because a Special Needs Trust is established for the purpose of preserving a beneficiary’s public benefits, the trustee has the added responsibilities of:
- Understanding the rules for the SSI and Medicaid programs, and ensuring that the distributions made by the trust do not jeopardize any public benefits;
- Reporting to and cooperating with the agencies that administer the beneficiary’s public benefits;
- Paying close attention to the special needs of the beneficiary, and looking after the beneficiary’s welfare; and
- Working closely with the others involved in the beneficiary’s life, such as family members, social workers, caregivers, and teachers, to ensure that the beneficiary’s needs are met.
The trustee of a Special Needs Trust has to develop a level of expertise, both about the rules for what kinds of trust distributions are and aren’t allowed, and about the details of the beneficiary’s life.
For example, the trustee needs to know what counts as a “food and shelter” distribution, and avoid making this type of distribution, since these affect SSI benefits. And, the trustee needs to know the limits for making direct distributions to a beneficiary – otherwise, benefits can be reduced.
The rules surrounding public benefits programs can create a minefield for a trustee to navigate. Because of this, many trustees seek guidance from a professional, such as an attorney with Special Needs Trust experience, in administering the trust.
Recognizing the challenges that come with this type of trust, many families choose to select a professional trustee, like a bank, trust company, attorney, or an appropriate nonprofit organization.
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