If you have a relative who has a disability, you may want to include a special needs trust in your overall estate plan. This type of trust gives your loved one access to funds to use on supplemental expenses without jeopardizing his or her eligibility for Medicaid, Supplemental Security Income or other means-tested public benefits.
When you create your special needs trust, you should give some thought to the person you choose to be the trustee. In addition to overseeing the trust, the special needs trustee performs three essential duties that are likely to benefit your relative.
1. Investing the trust’s assets
There are a few different ways to fund a special needs trust. Once you set up the trust, though, you likely want it to continue to grow. The special needs trustee should have an investment strategy.
While the trustee you designate may delegate investment responsibilities to a financial advisor or someone else, he or she should have a fundamental understanding of investments.
2. Approving trust disbursements
Because your loved one relies on means-tested public benefits to pay for housing, food and basic medical care, losing them may be catastrophic. Still, if your relative uses funds from the trust to pay for the same expenses public benefits cover, his or her eligibility may be on the line.
Consequently, the special needs trustee must know which disbursements are permissible and which ones are not.
3. Connecting essential services
Finally, the special needs trustee must closely monitor your relative’s needs. If your loved one is not receiving appropriate care, the trustee should connect him or her with essential services.
Ultimately, by playing a role in your relative’s care, the trustee can take steps to improve his or her quality of life.