Legal & Planning
Should a Professional or a Family Member Manage a Special Needs Trust?Serving as a trustee requires administrative and technical skills in addition to strong interpersonal communication skills. Identifying the appropriate trustee is difficult in general; a Special Needs Trust presents additional challenges. While most families will name a relative to serve as the trustee of their family’s Special Needs Trust, they are often unaware of the specialized knowledge needed to succeed in the role. In many cases, it makes sense to have a family member involved in some capacity in the care of the individual with special needs. However, the Special Needs Trust beneficiary is almost always best served when a professional trustee with the specialized skills is named as the trustee or co-trustee.
How to Evaluate AlternativesIn considering trustees to name for your Special Needs Trust, I suggest evaluating your alternatives with respect to the following characteristics:
- Administrative skills
- Communication skills
- Investment skills
- Knowledge of public benefits rules and regulations
- Available time to serve
- Desire to serve
- Ability to stay informed of legal and policy changes as they relate to Special Needs Trust administration.
Fiduciary DutyAll trustees owe a fiduciary duty to their beneficiaries. The fiduciary duty requires them to act in the best interests of the beneficiaries. The basic fiduciary requirements are as follows:
- Maintain detailed records
- Never co-mingle trust assets with the trustee's personal assets
- Invest the trust assets prudently
- File all required income tax and distribution reports on time.