Serving as a special needs trustee

A “special needs trust” (SNT) is typically created to provide financial support for a disabled individual. Aging parents of a person with Down syndrome might create an SNT to provide for their child’s needs after they have died.

The SNT trustee must manage the endowment to benefit the person with special needs over time. The trustee can be a family member or a professional attorney or trust officer. Often a savvy professional is hired even if a family member is a trustee. The professional provides investment guidance and ensures that funds released by the trust don’t jeopardize eligibility for public benefits (for example, money released for education might cause them to lose their Medicaid coverage).

The responsibilities of an SNT trustee include:

  • Releasing funds based on the allowable expenses outlined in the trust
  • Investing funds wisely
  • Maintaining records for full transparency
  • Filing state and federal income taxes
  • Making decisions always based on the wishes and best interest of the beneficiary
  • Communicating regularly with the beneficiary

While it is an honor to be chosen, if you are asked to be the trustee for a family member, talk with an SNT attorney and ask yourself:

  • Do you know your relative well enough to make decisions for them?
  • Do you understand investments and public benefit programs?
  • Is there a provision for hiring professionals such as an attorney, an Aging Life Care Manager or financial advisor?
  • How will this affect your personal relationship with your relative? You may have to regularly say “no” to their requests.
  • How long is your commitment (for your relative’s remaining life)?
  • Will you be paid?