If you have a loved one who has a disability, establishing a special needs trust may be an important part of your overall estate plan. This type of trust gives your relative access to funds for supplemental expenses without harming his or her eligibility for means-tested government benefits, like Medicaid or Supplemental Security Income.
When you set up your special needs trust, you name a trustee to manage it. While this trustee naturally takes care of bookkeeping and reporting tasks, he or she also performs some other valuable duties. Here are three of them.
1. Approving disbursements
For your special needs trust not to interfere with your loved one’s government benefits, he or she typically may not use funds on basic living expenses and medical care. Consequently, the special needs trustee must understand government program eligibility and approve only permissible disbursements.
2. Connecting services
To ensure your relative has what he or she needs to thrive, the special needs trustee may also need to connect services. That is, the trustee should communicate with the beneficiary and his or her caregivers. If a service is inadequate or missing altogether, the trustee may help improve access to care.
3. Investing resources
Your trustee should also responsibly invest the fund’s resources. To do so effectively, the trustee must understand how much risk is acceptable. He or she may also need to network with financial advisors to execute trades, make other investment transactions or secure additional financing for the trust.
While your special needs trustee does not have to be an investment professional, you probably want him or her to have some familiarity with investments. After all, with smart investing, the trust you establish may grow exponentially.