A Special Needs Trust (SNT) preserves the assets of a person with special needs to support his or her lifestyle. An SNT allows the person to receive supplemental resources without jeopardizing his or her public benefits. Public benefits include Supplemental Security Income (SSI) and Medicaid benefits. An SNT is usually created by a parent or loved one for a child with special needs. Oftentimes, parents may find it difficult to select a trustee for the SNT that he or she is funding. A trustee is responsible for overseeing administrative decisions, including any distributions.
There are various options available when naming a trustee for an SNT. The first option is for the parent or guardian to name himself or herself as trustee of the SNT. When the parent names himself or herself as a trustee of the SNT, he or she will have complete control over the distributions. A benefit to naming a parent or guardian as the trustee is that he or she is most familiar with the individual’s specific needs. Another benefit is that a parent or guardian will oversee the trust without compensation. However, there are certain public benefit regulations that could potentially affect the SNT if a parent or guardian is named as a sole trustee.
Another option is to name a corporate trustee. A corporate trustee is a professional with experience in public benefits and finances that will regularly review the trust. Some people feel that this option is too impersonal and are not comfortable with a professional overseeing their loved one’s SNT. In this case, a parent can serve alongside the corporate trustee. A parent will provide insight into the disabled individual’s needs.
An alternative option is to use a trust protector to supervise the corporate trustee. This is an independent third-party who oversees the corporate trustee’s decisions to ensure the trust will be used for its intended purpose. Depending on the selected responsibilities of the trust protector, he or she is able to replace a corporate trustee if he or she is not satisfied with the trustee’s decisions.
Another option is to use a pooled trust. When using a pooled trust, a non-profit organization is the SNT trustee and oversees its administration and distributions. It is important to speak with an experienced attorney to explore all the options available to you to meet your needs. Deciding who the trustee of an SNT is complex and can pose many concerns.
If you are in the process of planning for the future needs of a disabled child or loved one, an experienced New York estate planning attorney can give you the legal guidance necessary to help plan for their future. From the simple to complex, the attorneys at Blodnick, Fazio & Associates are skilled in all aspects of estate planning and dedicated to representing their clients with diligence and compassion. For more information or to schedule a consultation, contact our Garden City estate planning law firm, at (516) 280-7105.