Who Should Serve as a Trustee for a Special Needs Trust?
Estate planning is complicated, especially if you have a loved one with special needs. A special needs trust is an estate planning vehicle that lets you leave money or property to a special needs loved one without undermining their eligibility for public benefits, such as Supplemental Security Income (SSI) or Medicaid. As with any trust, you need the right trustee for a special needs trust. It is one of the most important decisions you will have to make when setting up the trust. Here, our Monmouth County special needs trust lawyer provides an overview of the considerations for who should serve as a trustee in New Jersey.
Consideration #1: You Need Someone Who Understands the Rules for Benefits
A trustee must be well-versed in the rules that govern SSI, Medicaid, and other related programs that are means-tested. Mistakes by a trustee can cause problems. In fact, even unintentional mistakes can result in a loss of benefits for your loved one. For example, providing cash distributions directly to the beneficiary could reduce or eliminate monthly SSI payments. The trustee should know how to make in-kind payments for things like housing or services without harming eligibility. There are complex federal and New Jersey state regulations that apply. The trustee should have technical knowledge.
Consideration #2: You Need a Person With Overall Financial Management Skills
Managing a special needs trust is more than following benefit rules. Trustees perform a wide range of different financial tasks, including overseeing investments, paying bills, and making sure the trust’s assets last as long as needed. Among other things, that requires sound financial judgment and sometimes professional experience with asset management. A trustee who lacks financial skills may unintentionally mismanage funds. For that reason, a loved one who lacks financial sophistication is generally not the right choice even if his or her heart is in the right place.
Consideration #3: You Need Someone With Willingness to Commit for the Long Term
A special needs trust is often designed to last for decades. It could potentially even last for the lifetime of the beneficiary. For that reason, a trustee must be able and willing to serve for the long haul. It is an important consideration when appointing a family member or close friend, as their own health, age, or life circumstances may prevent them from fulfilling the role indefinitely. Continuity is essential to protect the beneficiary’s financial security.
Consideration #4: You Need a Person Who Will Be a True Advocate
Finally, it is important to remember that a trustee’s role does not have to be purely financial. Of course, financial skills and legal knowledge matter, but so does a personal connection. A trustee who knows the beneficiary can make decisions that respect their lifestyle and needs. For example, they may approve spending on therapies, recreation, or services that enhance quality of life. It is an insight that is very hard for outsiders to replicate.
Call Our New Jersey Special Needs Trust Attorney Today
At Poulos LoPiccolo PC, our New Jersey estate planning attorney provides solutions-focused guidance and support. If you have any questions about special needs planning, we are here to help. Please do not hesitate to contact us online for a fully confidential consultation. With an office in Monmouth County, we provide estate planning representation throughout New Jersey.
