Do you have what it takes to be a special needs trustee?

On Behalf of | Jul 30, 2022 | Estate Planning

If someone you know has a child who has some type of disability, your friend may have asked you to serve as a special needs trustee. Before you accept the job, though, you should know exactly what it entails. You also should consider whether you have what it takes to be an effective special needs trustee.

Before considering your qualifications, you should understand what a special needs trust is. Generally, this type of trust gives the beneficiary access to funds to use on certain expenses while still making him or her eligible for means-tested government benefits.

What does a special needs trustee do?

As a special needs trustee, you must oversee the trust. This means you have responsibility for recordkeeping, reporting and investing. While you can delegate some of these responsibilities to professionals, you should have a working knowledge of them. You also must approve disbursements from the trust.

How do you approve disbursements?

According to AARP, the beneficiaries of special needs trusts can only use funds in the trust for expenses their public benefits do not traditionally cover. This usually makes living expenses, such as housing, food and basic medical care, off-limits. Consequently, before approving disbursements, you must understand what expenses are acceptable under the rules of the public benefits programs.

Can you opt out in the future?

If you decide to agree to be a special needs trustee, you may wonder if you are stuck with the job forever. Luckily, the answer is no. If you want to stop being the trustee, you can ask the person who formed the trust to select a different one.

Ultimately, because being a special needs trustee requires time, knowledge and effort, you should think carefully before accepting the job.