When parents have an adult child with profound disabilities, they often seek to protect that child’s future as much as they can by pouring their estate into a special needs trust for that child’s benefit.
Special needs trusts are specifically designed not to interfere with the disabled person’s access to public benefits. Like any other trust, they’re managed by a trustee – and you need to choose this person carefully. Here are a few things to consider:
Should you consider co-trustees?
Most of the time, trustees do their jobs honorably and well – but there are exceptions. A trustee who is selfish may subvert the trust in some way and violate their fiduciary duty for self-gain. A trustee who is simply inept can also cause disaster.
Your disabled adult child may not be able to recognize or understand any “red flags” that a trustee should be challenged or replaced and lack the capacity to take action to protect themselves from abuse. Having co-trustees may complicate some processes for the trust, but it can also help create a little more security for your loved one.
Does the potential trustee understand how public benefits work?
A lot of government programs that disabled adults rely on are strictly “needs-based.” This includes things like Section 8 housing, Medicaid and Supplemental Security Income (SSI).
If a trustee mishandles the funds in the trust, it could have serious consequences for your disabled adult child. To prevent problems, you want to select a trustee who either has a good understanding of the public benefits system or someone willing to work with a special needs planner, when necessary, to avoid mistakes.
If you’re contemplating a special needs trust for one of your children, it can help to get legal guidance that’s tailored to the specifics of your situation.