3 essential qualities of a special needs trustee

On Behalf of | Nov 6, 2020 | Estate Planning

Provided they have limited incomes and assets, disabled Hoosiers often qualify for Supplement Security Income or other needs-based government help. A special needs trust is an estate planning tool that provides funds for the benefit of your disabled loved one without jeopardizing eligibility for means-tested assistance. 

When setting up a special needs trust, you have wide flexibility to choose a trustee to oversee it. Still, some individuals make better trustees than others. Here are three essential qualities you likely want your special needs trustee to have. 

1. Competence

All special needs trusts have certain rules they must follow. They also have terms the trustee must implement. Consequently, at a minimum, your special needs trustee should have a working knowledge of the trust, its accounting requirements and its legal obligations. 

2. Protection

Being able to manage the trust competently is only part of the equation. Your special needs trust must also protect the beneficiary, who is your disabled loved one. This likely requires understanding government program eligibility and scrutinizing prospective disbursements. The trustee may also need to collaborate with your relative’s caregivers to ensure he or she has access to essential services. 

3. Prudence

Special needs trustees should not take their jobs lightly. After all, a trustee must make wise decisions about the trust, including its investments, while striving to meet the needs of the beneficiary. Accomplishing these tasks usually requires both prudence and diligence. 

Government entitlement programs have strict qualification rules and other requirements. A prudent trustee takes great care to ensure your loved one has access to funds that improve quality of life without inadvertently sabotaging eligibility for needs-based financial assistance.