What are your duties as a special needs trustee?
March 7, 2022
Parents of children who have disabilities often elect to form special needs trusts. These trusts, which are an integral part of many comprehensive estate plans, provide financial support to beneficiaries without actually transferring wealth to them. Consequently, beneficiaries usually remain eligible for means-tested government benefits.
If someone has asked you to be a special needs trustee, you have the responsibility of overseeing the trust. This is not a responsibility you should take lightly, as the beneficiary’s quality of life may depend on how well you do your job.
As a special needs trustee, you have some managerial duties you must perform. These include recordkeeping, tax reporting and investing. Still, you do not necessarily have to tackle all these tasks yourself, as you can entrust them to financial advisors, accountants or other responsible professionals.
As AARP points out, beneficiaries of special needs trusts cannot use funds from the trust to pay for living expenses or other expenses means-tested government benefits cover. Consequently, you must scrutinize each disbursement request to be sure it does not violate the rules of the programs the beneficiary uses.
You are likely to get to know the beneficiary of the special needs trust quite well. Therefore, you may be in a good position to help him or her access necessary services. If there are gaps in medical care, social services or other needs, you may need to coordinate assistance.
Serving as a special needs trustee can be a rewarding experience. Ultimately, by understanding what the role entails, you can make an informed decision about whether you want to assume it.