If you have a loved one who has a disability, you may want to use your estate plan to establish a special needs trust. This type of trust gives your relative access to funds for supplemental expenses without endangering his or her eligibility for means-tested government benefits.
When you form a special needs trust, you typically designate a trustee to manage it. This trustee, who acts as a fiduciary, performs four essential duties.
1. Overseeing the special needs trust
Arguably, overseeing the special needs trust is the most important part of being a trustee. This includes both keeping comprehensive records and complying with tax and reporting obligations.
2. Investing funds from the trust
With savvy investing, funds in the special needs trust should grow. While the special needs trustee does not necessarily have to handle day-to-day investment activities, he or she should have a working knowledge of trust fund investments.
3. Approving fund disbursements
If your loved one uses funds from the trust on impermissible expenses, he or she may inadvertently become ineligible for public assistance. Consequently, the special needs trust should understand public benefits and only approve allowable disbursements.
4. Connecting your loved one with vital services
To thrive, your loved one may need home modifications, therapy, rehabilitation and other essential services. If your relative cannot access these services on his or her own, the special needs trustee may reach out to care providers for help.
Ultimately, knowing the special needs trustee is looking out for your loved one’s health care and other interests may give you the peace of mind you seek from your estate plan.