If you are the parent of a child who has a disability, setting up a special needs trust may be an important part of your overall estate plan. This type of trust holds funds for the benefit of your son or daughter without causing him or her to lose eligibility for means-tested government benefits.
When you establish a special needs trust, you must designate a trustee to manage it. As Nerd Wallet summarizes, trustees have many critical responsibilities, including recordkeeping, reporting, investing and approving disbursements. Therefore, you must be certain you pick the right trustee for the job.
While it is probably not necessary to choose a financial professional to act as your trustee, you want to find someone who knows about trust management. Not only should your trustee understand the parameters of the trust, but he or she should have some familiarity with applicable federal and state laws.
Your child may use disbursements from the special needs trust to pay for supplement expenses that government programs do not cover. If your son or daughter spends funds incorrectly, he or she may become ineligible for government help. Consequently, your trustee must know about government programs, including their income thresholds.
After your death, your child and his or her caregivers may have different opinions about how to use the special needs trust. Accordingly, it may be advisable to pick a trustee who understands how to resolve conflicts. Your trustee should also be comfortable with making others unhappy when necessary.
Ultimately, because it may take some time to interview and choose the perfect trustee for your special needs trust, you may want to start your selection process as soon as possible.