Trustees of special needs trusts wear many hats. They act as investment manager, bookkeeper, distribution manager, benefits advocate, and financial planner. Often trustees are in constant communication with the beneficiary and/or the beneficiary’s caregivers regarding many aspects of the beneficiary’s life. The trustee is responsible for approving distributions for major expenditures like the purchase of a vehicle, or even of a home.
Trustees of Special Needs Trusts are Responsible for Financial Decision-making
The trustee’s level of involvement can be confusing for beneficiaries and their families. Control over finances may create the impression that the trustee has decision-making power over all aspects of a beneficiary’s life. If a trustee can approve or reject the proposed purchase price of a home for the beneficiary, can’t they also decide where the beneficiary lives? In general, the answer is no.
The trustee is responsible for approving distributions from the trust for the beneficiary. However, the trustee’s duties do not generally extend to day-to-day decisions about the beneficiary’s care. These decisions are typically made by the beneficiary, a close family member, or a guardian who is acting as the care manager. The trustee should work together with the beneficiary and/or caregivers to make sure the beneficiary’s financial needs are met.
Serving Dual Roles
Often, parents or close family members will be named as trustees of a special needs trust. In that circumstance, the family member will be acting as care manager when making decisions regarding the beneficiary’s care. When a family member is serving this dual role, it is even more crucial to plan ahead. Eventually that person may no longer be able to manage the trust or the beneficiary’s day-t0-day care. Advanced planning can prevent a gap in care.
If you have questions about the trustee’s role, or how to ensure that your loved one will be cared for even when his or her current caregivers are no longer able, send us a message.
Revised and published with permission from the American Society of Special Needs Planners.