You may already know what a special needs trust is. Many parents understand that its primary purpose is to retain assets for a child with special needs while preserving the child’s means-tested benefits, such as SSI and Medicaid. Frequently, however, that’s where a parent’s understanding ends. When a parent asks if he or she has chosen their child’s trustee, they don’t have an initial response.
Initial Trustee Conversation
Inevitably, the parent starts the conversation wanting a friend or family member to “run” their child’s special needs trust. This is understandable as they usually know and trust this person implicitly. Typically, this family member is already in their child’s life and is already playing a supporting role. Most parents want this role to continue after their passing, and they want their child to have the continuity of working with a loved one. As a bonus, this friend or family member doesn’t plan to charge for the service of being the child’s trustee.
I have found that once parents learn about the duties and obligations of a trustee, they start seeing the value in having a professional play that role. When they learn they can nominate their trusted loved one as a guardian (if one is necessary), they start to feel better. Having a “team” approach utilizing a corporate trustee and a family member guardian often brings comfort to families and is the best approach to ensuring successful outcomes for your child.
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