{"id":47,"date":"2011-02-10T09:48:18","date_gmt":"2011-02-10T17:48:18","guid":{"rendered":"https:\/\/www.wyattlegal.com\/blog\/?p=47"},"modified":"2012-07-19T14:59:39","modified_gmt":"2012-07-19T21:59:39","slug":"who-should-be-trustee-of-a-special-needs-trust","status":"publish","type":"post","link":"https:\/\/www.wyattlegal.com\/blog\/2011\/02\/10\/who-should-be-trustee-of-a-special-needs-trust\/","title":{"rendered":"Who Should Be Trustee of a Special Needs Trust?"},"content":{"rendered":"

Clients and other attorneys regularly ask me who can be the trustee of a Special Needs Trust.\u00a0 The quick answer is that it cannot be the person with a disability (i.e<\/em>., the beneficiary) or their spouse.\u00a0 The law effectively prohibits it.\u00a0 If we were to make the beneficiary or their spouse trustee, the funds held in trust would be considered a \u201cresource\u201d of the beneficiary under the Medi-Cal and Supplemental Security Income (SSI) rules.\u00a0 That means the beneficiary would lose those critical benefits, defeating one of the primary purposes of the Special Needs Trust.<\/p>\n

Fortunately, there are always other options for trustee, including a licensed professional fiduciary, a bank, or a qualified family member.<\/p>\n

Regardless of who is selected, the trustee must have some essential characteristics.\u00a0 My colleague in the Academy of Special Needs Planners<\/a>, Linda S. Durston, Ph.D., J.D., recently summed up these qualifications nicely:<\/p>\n

Every trustee should have common sense and good business sense; be honest; be organized; know when to ask for the assistance of a certified financial planner (CFP), a certified public accountant (CPA) or an attorney; be physically and mentally capable of dealing with the legal, tax, investment, accounting and interpersonal issues that arise in the course of administration, and have time to handle those tasks.\u00a0 A special needs trustee will also need to understand the beneficiary\u2019s special needs, government benefit programs and the effects of distributions on public benefits eligibility.<\/p>\n

There are some circumstances where a trustee must have additional qualifications.\u00a0 For example, here in Sacramento County (as well as in many other counties in California), we often must establish a Special Needs Trust by petitioning the Probate Court.\u00a0 This typically happens after a litigation recovery by an incapacitated or a minor plaintiff, or after\u00a0an inheritance by someone whose parents failed to incorporate special needs planning with their will or living trust.\u00a0 In those instances, whoever serves as trustee must be bonded (i.e<\/em>., for the amount held in trust, plus interest, plus the costs of recovering on the bond).\u00a0 The trustee must also be prepared to account and report regularly to the court for all activities and expenditures on behalf of the trust.\u00a0 These bonding\/reporting requirements can be onerous, and not everyone has the personal credit rating or the\u00a0experience to do what’s necessary to satisfy the court.<\/p>\n

So who is the best trustee of a Special Needs Trust?\u00a0 If the trust is \u201ccourt-established,\u201d we\u2019ll almost always have a professional trustee regardless of the dollar amount involved.\u00a0 But when the trust can be established by someone other than a court, we sometimes consider a qualified family member.\u00a0 This is especially true in smaller cases (i.e<\/em>., those cases where the amount in trust is less than $100,000) or when it’s a parent trustee.<\/p>\n

Persons with disabilities should know that they will still fully benefit from their trust\u00a0funds even though they\u00a0cannot serve as trustee and may not have a qualified family member to help.\u00a0 Professional trustees are used to hearing from beneficiaries.\u00a0 Plus, by investing carefully, a professional trustee may more than pay for themselves.<\/p>\n

Serving as trustee of a Special Needs Trust is a tremendous responsibility.\u00a0 If you are considering a Special Needs Trust in California, please contact our office<\/a> for assistance.\u00a0 We\u2019ll help you make the right choices.<\/p>\n","protected":false},"excerpt":{"rendered":"

Clients and other attorneys regularly ask me who can be the trustee of a Special Needs Trust.\u00a0 The quick answer is that it cannot be the person with a disability (i.e., the beneficiary) or their spouse.\u00a0 The law effectively prohibits it.\u00a0 If we were to make the beneficiary or their spouse trustee, the funds held  Read more…<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[5],"tags":[13,10,8,12,9,11],"_links":{"self":[{"href":"https:\/\/www.wyattlegal.com\/blog\/wp-json\/wp\/v2\/posts\/47"}],"collection":[{"href":"https:\/\/www.wyattlegal.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.wyattlegal.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.wyattlegal.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.wyattlegal.com\/blog\/wp-json\/wp\/v2\/comments?post=47"}],"version-history":[{"count":21,"href":"https:\/\/www.wyattlegal.com\/blog\/wp-json\/wp\/v2\/posts\/47\/revisions"}],"predecessor-version":[{"id":160,"href":"https:\/\/www.wyattlegal.com\/blog\/wp-json\/wp\/v2\/posts\/47\/revisions\/160"}],"wp:attachment":[{"href":"https:\/\/www.wyattlegal.com\/blog\/wp-json\/wp\/v2\/media?parent=47"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.wyattlegal.com\/blog\/wp-json\/wp\/v2\/categories?post=47"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.wyattlegal.com\/blog\/wp-json\/wp\/v2\/tags?post=47"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}