How Do I Choose a Trustee?

Choosing a trustee is one of the most important and difficult issues in special needs trusts. The trustee must have the necessary expertise to manage the trust, including making proper investments, paying bills, keeping accounts, and preparing tax returns. A professional trustee will have these skills but may be unfamiliar with the beneficiary and their unique needs.

Professional Trustees and Advisors Can Provide the Right Support

For those who may be uncomfortable with the idea of an outsider managing a loved one's affairs, it is possible to simultaneously appoint both a professional trustee and a family member as co-trustees. It's also possible to hire a trust "protector," who has the power to review accounts and to hire and fire trustees, and a trust "advisor," who instructs the trustee on the beneficiary's needs.

However, if the trust fund is small, a professional trustee may not be interested. Make sure that whomever you choose is financially savvy, well-organized, and ethical. Decisions must always be made in the beneficiary's best interests.

Pooled Trusts

A pooled trust, also referred to as a (d)(4)(C) trust, is a type of special needs trust established and managed by a nonprofit. Individual beneficiaries create accounts within a larger trust, where the assets of many people with special needs are pooled together. If you do not have a family member who has the skills or motivation to accept the role of trustee, you can still have access to a professional trustee.

Because a pooled trust accepts contributions from many beneficiaries, the trust can make more stable investments and provide additional management services that some families might not be able to afford. 

Contact a special needs planner in your area for advice when choosing a special needs trust beneficiary. They can also help families choose the right type of trust, set up the trust, explain how to fund it, and provide regular reviews to keep up with changes in your family's circumstances.