All Trustees, guardians and fiduciaries are required to keep track of and report the money in their control. This duty is particularly important with respect to special needs trusts, when the dependent child or person relies on the appropriate delegation of funds to maintain a lifestyle.
While the requirements to be a considered a competent Trustee are fairly basic, you should be very selective when appointing a Trustee or guardian.
It is important to consider a few qualities:
- The Trustee must be capable of managing someone else’s affairs, in addition to balancing his or her own affairs.
- A Trustee must be able to balance a checkbook and be fiscally responsible.
- The Trustee must know when to enlist the help of professionals if a duty arises that is beyond his or her knowledge and control.
- The Trustee must be aware of potential conflicts, such as balancing special needs trust benefits so as not to deplete SSI benefits the dependent already receives.
- When acting as a fiduciary, a Trustee should have the beneficiary in mind. They should not become overwhelmed by the sudden responsibility of distributing funds to the beneficiary in need.
Who to Ask?
Family members and close friends seem to be ideal candidates because they are both aware of the beneficiary’s needs and sensitive to the personal situation. Having someone you trust manage the financials of a person you care about can give you piece of mind.
Sometimes, however, appointing a family member to such an important position can be uncomfortable and/or undesirable. In order to avoid possible conflict between family members, a 3rd party can be appointed. This third party should be someone independent and unrelated to the matter, who is able to competently and efficiently manage the special needs trust. This fiduciary could be a bank, a financial advisor, a lawyer, or another professional with extensive knowledge of financial matters whom can also be held accountable without the sticky and unpredictable ties of family and feelings.
How We Can Help
As your estate planning advisors, we can help you can create a checks and balances system for a special needs trust. With proper legal planning, it is possible to ensure that your beneficiary receives the support that he or she needs, without completely relinquishing control or appointing someone or some entity with no knowledge of your personal dynamics and situation. It’s our job to help you navigate the legal obstacles, while also keeping in mind the best interest of the beneficiary.