A special needs trust is one of the best options if you are disabled and want to qualify for Medicaid while protecting your assets. If you have a friend or a family member who has a disability and you wish to give this friend or relative money, you also need to consider the creation of a special needs trust. When you create this trust, you need to name someone who will act as a trustee. The decision on who should be a trustee is a very important one.
As you follow the formal legal steps to create a special needs trust and to select a trustee, you should speak with an experienced Sharonville estate planning attorney.
Zimmer Law Firm has extensive experience providing assistance with the creation of first party special needs trusts and with the creation of third party special needs trusts. We will make sure the legal requirements are met and appropriate steps taken so the trust can serve its desired purpose and we will help you to ensure you have made the most informed choice possible on who the trustee should be. Call now to learn more.
Choosing a Trustee for a Special Needs Trust
A special needs trust is created to help preserve eligibility for Supplemental Security Income (SSI), Medicaid, and other government programs that help to provide for people with disabilities. If you are disabled or someone you love has a disability, access to SSI and Medicaid can be essential to help with big medical costs and to have monthly income coming in.
Unfortunately, these programs and many other government programs are means-tested and eligibility is limited based on resource levels. As a result, when a person with a disability receives money through an injury settlement, an inheritance, an inter vivos gift, or from any source, important benefits could be lost. A special needs trust helps preserve those benefits because the trust is the owner of the assets and the assets don’t count as resources when determining benefits eligibility.
The trust owns the assets, but the assets need to be used for the benefit of the person with the disability. The trustee is the person who is vested with the responsibility of managing the assets in the trust, as well as using those assets to provide a better quality of life for the person with the disability.
The person with the disability cannot be given cash, or cash equivalents, from the special needs trust without benefits potentially being affected. This means the trustee has an enormous responsibility to ensure that the money is used to provide for the needs and desires of the person with the disability without actually giving that individual cash.
Trustees of any trust have a fiduciary responsibility to beneficiaries of the trust to manage assets in the best interest of those beneficiaries. It just becomes more complicated, and the stakes are higher, when the beneficiary is someone with special needs who may not be able to clearly communicate his or her desires.
To make sure that the right trustee is chosen, you should consider:
- Who you can count on. While the fiduciary duty owed by the trustee is the highest duty under the law, trustees still sometimes abuse their authority. You want to make sure the person you choose as trustee won’t do that.
- Who knows the trust beneficiary. It is ideal if the trustee knows and cares about the beneficiary of the trust. If the trustee has a close relationship with the person who has the disability and who is supposed to benefit from the trust, the trustee will know what kinds of things to buy and do with the money to best enrich quality of life.
- Who has no conflicts of interest. You don’t want the trustee to have any competing interests other than doing the best job possible to manage trust assets and use them appropriately.
- Who understands how best to manage assets. The trustee not only needs to use the money for the person with disabilities but also needs to make wise spending and investment choices to make the money last.
These are just a few key considerations when you choose someone to act as a trustee for a special needs trust. An experienced attorney can help you to weigh your options and select the best trustee.
Getting Help with a Special Needs Trust
When you want to learn more about special needs trusts, you can join us for a free seminar. If you are ready to create a trust to protect your assets or to provide a gift for a person with special needs, give Zimmer Law Firm a call at 513.721.1513 to speak with an experienced Sharonville special needs trust lawyer.